Cactus Inc (NYSE: WHD) details Baker Hughes JV, FlexSteel deal and oilfield risks
Filing Impact
Filing Sentiment
Form Type
10-K
Rhea-AI Filing Summary
Cactus, Inc. is an oilfield services company focused on designing, manufacturing, selling and renting pressure control equipment and spoolable pipe for onshore unconventional oil and gas wells. It operates through two segments: Pressure Control (wellheads, frac trees and related services) and Spoolable Technologies (FlexSteel-branded pipe and fittings).
The company has expanded through acquisitions and partnerships. It bought the FlexSteel business in 2023 for $658.6 million, strengthening its spoolable pipe offering. On January 1, 2026, it acquired 65% of Baker Hughes Pressure Control LLC for $344.5 million, creating an international joint venture that adds former Baker Hughes surface pressure control operations, with put/call rights on the remaining stake based on a multiple of trailing Adjusted EBITDA.
Revenue is primarily product-based: in 2025, 76% of total revenues came from product sales, 8% from rentals and 16% from field service and other. Results are cyclical and closely tied to oil and gas activity, particularly U.S. drilling and completions, and increasingly international markets such as the Middle East.
Cactus highlights extensive environmental, health and safety, and regulatory risks, including hydraulic fracturing scrutiny, climate-related rules and global trade disruptions. The structure includes Class A and Class B shares and a tax receivable agreement; as of year-end 2025 Cactus Inc. owned 86.3% of Cactus Companies, with Cactus WH Enterprises holding 12.1% of voting power.
Positive
- None.
Negative
- None.
Insights
Cactus adds a major Baker Hughes JV while deepening exposure to cyclical oilfield activity.
Cactus, Inc. has evolved into a two-segment platform combining Pressure Control equipment with FlexSteel spoolable pipe. The 2023 FlexSteel acquisition for
The January
The filing underscores sensitivity to oil and gas cycles, regulatory changes around hydraulic fracturing and climate policy, and supply chain costs such as tariffs on steel and imports from China, India and Vietnam. It also details a tax receivable agreement and multi-class structure that create ongoing cash obligations and concentrate voting power, factors that can influence future capital allocation and corporate actions.
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
For the fiscal year ended December 31 , 2025
or
For the transition period from to
Commission File Number: 001-38390
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||
| (Address of principal executive offices) | (Zip code) | ||||
(713 ) 626-8800
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well‑known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☑ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☑
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b‑2 of the Exchange Act.
| ☑ | Accelerated filer | ☐ | |||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
| Emerging growth company | |||||||||||
If an emerging growth company indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☑
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b‑2 of the Exchange Act). Yes ☐ No ☑
As of June 30, 2025, the aggregate market value of the common stock of the registrant held by non-affiliates of the registrant was $3.0 billion.
As of February 25, 2026, the registrant had 68,899,841 shares of Class A common stock, $0.01 par value per share, and 10,958,435 shares of Class B common stock, $0.01 par value per share, outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Table of Contents
TABLE OF CONTENTS
Cautionary Statement Regarding Forward-Looking Statements | ii | |||||||
PART I | 1 | |||||||
| Item 1. | Business | 1 | ||||||
| Item 1A. | Risk Factors | 10 | ||||||
| Item 1B. | Unresolved Staff Comments | 22 | ||||||
| Item 1C. | Cybersecurity | 22 | ||||||
| Item 2. | Properties | 24 | ||||||
| Item 3. | Legal Proceedings | 24 | ||||||
| Item 4. | Mine Safety Disclosures | 24 | ||||||
PART II | 25 | |||||||
| Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 25 | ||||||
| Item 6. | (Reserved) | 27 | ||||||
| Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 28 | ||||||
| Item 7A. | Quantitative and Qualitative Disclosures about Market Risk | 38 | ||||||
| Item 8. | Financial Statements and Supplementary Data | 39 | ||||||
| Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 75 | ||||||
| Item 9A. | Controls and Procedures | 75 | ||||||
| Item 9B. | Other Information | 75 | ||||||
| Item 9C. | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | 75 | ||||||
PART III | 75 | |||||||
| Item 10. | Directors, Executive Officers and Corporate Governance | 75 | ||||||
| Item 11. | Executive Compensation | 75 | ||||||
| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 75 | ||||||
| Item 13. | Certain Relationships and Related Transactions, and Director Independence | 75 | ||||||
| Item 14. | Principal Accountant Fees and Services | 76 | ||||||
PART IV | 76 | |||||||
| Item 15. | Exhibits and Financial Statement Schedules | 76 | ||||||
| Item 16. | Form 10‑K Summary | 79 | ||||||
Signatures | 80 | |||||||
i
Table of Contents
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10‑K (this “Annual Report”) contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). When used in this Annual Report, the words “attempt,” “could,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project” and similar expressions are intended to identify forward‑looking statements, although not all forward‑looking statements contain such identifying words. These forward‑looking statements are based on our current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. When considering forward‑looking statements, you should keep in mind the risk factors and other cautionary statements described under the heading “Item 1A. Risk Factors” included in this Annual Report and other cautionary statements contained herein.
We caution you that these forward‑looking statements are subject to all of the risks and uncertainties, most of which are difficult to predict and many of which are beyond our control, incident to the operation of our business. These risks include but are not limited to the risks described in this Annual Report under “Item 1A. Risk Factors.” Should one or more of the risks or uncertainties described in this Annual Report occur, or should underlying assumptions prove incorrect, our actual results could differ materially from those expressed in any forward‑looking statements.
All forward‑looking statements, expressed or implied, included in this Annual Report are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward‑looking statements that we or persons acting on our behalf may issue. Except as otherwise required by applicable law, we disclaim any duty to update any forward‑looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this Annual Report.
ii
Table of Contents
PART I
In this Annual Report, unless the context otherwise requires, references to the "Company," "we," "us," "our" and "Cactus" refer to Cactus Inc. and its consolidated subsidiaries.
Item 1. Business
General
Cactus, Inc. (“Cactus Inc.”) was incorporated on February 17, 2017 as a Delaware corporation for the purpose of completing an initial public offering of equity, which was completed on February 12, 2018 (our “IPO”). We began operating in August 2011 following the formation of Cactus Wellhead, LLC (“Cactus LLC”) in part by Scott Bender and Joel Bender, who have owned or operated wellhead manufacturing businesses since the late 1970s.
"The Company" is primarily engaged in the design, manufacture, sale and rental of highly engineered pressure control and spoolable pipe technologies. Our products are sold and rented principally for onshore unconventional oil and gas wells and are utilized during the drilling, completion and production phases of our customers’ wells. We also provide field services for all of our products and rental items to assist with the installation, maintenance and handling of the equipment. Additionally, we offer repair and refurbishment services as appropriate. We operate through service centers and pipe yards located in the United States, Canada and Australia. We also provide rental and service operations in the Middle East and other select international markets. Our primary manufacturing and production facilities are in Bossier City, Louisiana, Baytown, Texas and Suzhou, China. In addition, a new plant is commencing production in Vietnam. Our corporate headquarters are located in Houston, Texas.
On January 1, 2026, the Company acquired 65% of Baker Hughes Pressure Control LLC, which holds Baker Hughes Company's former surface pressure control business. See "Cactus International Joint Venture with Baker Hughes" below.
FlexSteel Acquisition
On February 28, 2023, we completed the acquisition of the FlexSteel business (the “Merger”) through a merger with HighRidge Resources, Inc. and its subsidiaries (“HighRidge”). The purpose of the Merger was to effect the acquisition of the operations of FlexSteel Holdings, Inc. and its subsidiaries. We completed the acquisition on a cash-free, debt-free basis and paid total cash consideration of $658.6 million which included the initial purchase consideration, final adjustments for closing working capital, cash on hand and indebtedness adjustments, and earn-out payments made in 2024 as set forth in the related merger agreement.
Current Ownership Structure
On February 27, 2023, an internal reorganization (the “CC Reorganization”) was completed to facilitate the Merger. Cactus Companies, LLC (“Cactus Companies”), a wholly-owned subsidiary of Cactus Inc., acquired all of the outstanding units representing limited liability ownership interests in Cactus LLC (“CW Units”), the operating subsidiary of Cactus Inc., in exchange for an equal number of units representing limited liability company interests in Cactus Companies (“CC Units”).
Cactus Inc. is a holding company whose only material assets are CC Units, which Cactus Inc. holds both directly and indirectly. Cactus Inc. is the sole managing member of Cactus Companies. Cactus Inc. (directly and through a wholly owned subsidiary) and the other owners of CC Units entered into the Amended and Restated Limited Liability Company Operating Agreement of Cactus Companies (the “Cactus Companies LLC Agreement”), which provides for Cactus Inc. to be responsible for all operational, management and administrative decisions relating to Cactus Companies’ business.
Holders of CC Units other than Cactus Inc. (such holders, "CC Unit Holders") own one share of Cactus Inc.'s Class B common stock, par value $0.01 per share ("Class B common stock"), for each CC Unit such CC Unit Holder owns and Cactus Companies is the sole member of Cactus LLC. Pursuant to the Cactus Companies LLC Agreement, owners of CC Units are entitled to redeem their CC Units for shares of Cactus Inc.’s Class A common stock, par value $0.01 per share ("Class A common stock") on a one-for-one basis, which would result in a corresponding increase in Cactus Inc.’s membership interest in Cactus Companies and an increase in the number of shares of Class A common stock outstanding.
Since our IPO through December 31, 2025, 49.6 million CC Units (including CW Units prior to the CC Reorganization) and a corresponding number of shares of Class B common stock have been redeemed in exchange for shares of Class A common stock. Holders of Class A common stock and Class B common stock vote together as a single class on all
1
Table of Contents
matters presented to our stockholders for their vote or approval, except as otherwise required by applicable law or our amended and restated certificate of incorporation. Cactus WH Enterprises, LLC (“Cactus WH Enterprises”) is the largest CC Unit Holder. Cactus WH Enterprises is a Delaware limited liability company owned by Scott Bender, Joel Bender, and Steven Bender, each of whom is an executive officer of Cactus Inc. As of December 31, 2025, Cactus Inc. owned 86.3% and CC Unit Holders owned 13.7% of Cactus Companies, which was based on approximately 68.9 million shares of Class A common stock issued and outstanding and approximately 11.0 million shares of Class B common stock issued and outstanding. Cactus WH Enterprises held approximately 12.1% of our voting power as of December 31, 2025.
The following diagram indicates our simplified ownership structure as of December 31, 2025:
Cactus International Joint Venture with Baker Hughes
On January 1, 2026 (the “Closing Date”), Baker Hughes Holdings LLC ("Baker Hughes Holdings") and certain of its affiliates sold 65% of the limited liability company membership interests ("Membership Interests") in Baker Hughes Pressure Control LLC (the "Joint Venture" or "Cactus International"), which holds Baker Hughes Company's former surface pressure control business (the "Acquired Business") to Cactus UK Holding Limited (the “Cactus Member”), a subsidiary of Cactus Companies, for a cash purchase price of $344.5 million, subject to certain working capital, cash, debt, capital expenditure and other customary adjustments (the "Baker Hughes Transaction").
2
Table of Contents
For so long as Baker Hughes Pressure Control Holdings LLC (the "Baker Member") continues to hold Membership Interests, the Cactus Member shall cause the Joint Venture to operate its business generally in the ordinary course. Certain actions of the Board of Directors of the Joint Venture require the affirmative vote of at least one director appointed by the Baker Member. Baker Hughes Company ("Baker Hughes Company") and the Company will have specific non-compete restrictions with respect to surface pressure control applications in certain countries, and the members of the Joint Venture are subject to certain transfer restrictions with respect to the Membership Interests.
From and after the second anniversary of the Closing Date, the Baker Member has the right to sell to either the Joint Venture or the Cactus Member, and the Cactus Member has the right to purchase or cause the Joint Venture to purchase, all of the Membership Interests held directly or indirectly by Baker Hughes Company. The purchase price will be based on an enterprise value of the Joint Venture using a multiple of six times its trailing twelve month ("TTM") Adjusted EBITDA (as defined and calculated pursuant to the Amended and Restated Limited Liability Company Agreement of the Joint Venture, entered into on the Closing Date by the Joint Venture, the Cactus Member, the Baker Member, Cactus Inc. and Baker Hughes Company (the "Joint Venture LLC Agreement")), subject to a maximum valuation of $660.0 million, and if the Cactus Member elects to purchase or cause the Joint Venture to purchase the Membership Interests, a minimum valuation of $530.0 million applies. In connection with the Baker Hughes Transaction, Cactus Companies is obligated to pay Baker Hughes Holdings $10.0 million on the first anniversary of the Closing Date and $14.5 million at such time as Baker Hughes Company ceases to be a member of the Joint Venture.
For further information on the Joint Venture please refer to (i) the complete text of the Joint Venture LLC Agreement, a copy of which is filed as Exhibit 10.29 to this Annual Report and (ii) note 19 to our consolidated financial statements.
Our Products and Services
We have two operating segments consisting of Pressure Control and Spoolable Technologies. See discussion below of each operating segment.
Pressure Control
The Pressure Control segment designs, manufactures, sells and rents a range of wellhead and pressure control equipment under the Cactus Wellhead brand. Products are sold and rented principally for onshore unconventional oil and gas wells and are utilized during the drilling, completion and production phases of our customers’ wells. In addition, we provide field services for all of our products and rental items to assist with the installation, maintenance and handling of the equipment.
We operate through service centers in the United States, which are strategically located in the key oil and gas producing regions, and in Eastern Australia. These service centers support our field services and provide equipment assembly and repair services. We also provide rental and service operations in the Middle East. Pressure Control manufacturing and production facilities are located in Bossier City, Louisiana, Suzhou, China and Hai Duong, Vietnam.
Demand for our product sales in the Pressure Control segment is driven primarily by the number of new wells drilled, as each new well requires a wellhead and, after the completion phase, a production tree. Demand for our rental items is driven primarily by the number of well completions as we rent frac trees to oil and gas operators to assist in hydraulic fracturing. To a lesser extent, rental demand is also driven by drilling activity as we rent tools used in the installation of wellheads. Field service and other revenues are closely correlated with revenues from product sales and rentals, as items sold or rented almost always have an associated service component.
Spoolable Technologies
The Spoolable Technologies segment designs, manufactures, and sells spoolable pipe and associated end fittings under the FlexSteel brand. Our customers use these products primarily as production, gathering and takeaway pipelines to transport oil, gas or other liquids. In addition, we provide field services and rental items to assist our customers with the installation of these products. We support our field service operations through service centers and pipe yards located in oil and gas regions throughout the United States and Western Canada. We also provide equipment and services in select international markets. The Spoolable Technologies manufacturing facility is located in Baytown, Texas.
Demand for our product sales in the Spoolable Technologies segment is driven primarily by the number of wells being placed into production after the completions phase as customers use our spoolable pipe and associated fittings to bring wells more rapidly onto production. Rental and field service and other revenues are closely correlated with revenues from product sales, as items sold usually have an associated rental and service component.
3
Table of Contents
Our Revenues
Our revenues are derived from three sources: products, rentals, and field service and other. Product revenues are derived from the sale of wellhead systems, production trees and spoolable pipe and fittings. Rental revenues are primarily derived from the rental of equipment used during the completion process, the repair of such equipment and the rental of equipment or tools used to install wellhead equipment and spoolable pipe. Field service and other revenues are primarily earned when we provide installation and other field services for both product sales and equipment rental.
For the year ended December 31, 2025, we derived 76% of our total revenues from the sale of our products, 8% from rentals and 16% from field service and other. In 2024, we derived 75% of our total revenues from the sale of our products, 9% from rentals and 16% from field service and other. In 2023, we derived 74% of our total revenues from the sale of our products, 10% from rentals and 16% from field service and other. We have predominantly domestic operations and sales, but also generate revenues in Australia, Canada and other select international markets. As a result of the Baker Hughes Transaction, we expect that a greater portion of our operations and sales will be attributable to international markets, particularly the Middle East.
Most of our sales are made on a call out basis pursuant to customer agreements, wherein our clients provide delivery instructions for goods and/or services as their operations require. Such goods and services are most often priced in accordance with a preapproved price list. The actual pricing of our products and services is impacted by a number of factors including competitive pricing pressure, the value perceived by our customers, the level of utilized capacity in the oil service sector, cost of manufacturing the product, cost of providing the service, and general market conditions. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Recent Developments and Trends” for a discussion of trends in market demand.
Costs of Conducting Our Business
The principal elements of cost of sales for our products are the direct and indirect costs to manufacture and supply our products, including labor, materials, machine time, tariffs and duties, freight and lease expenses related to our facilities. The principal elements of cost of sales for rentals are the direct and indirect costs of manufacturing and supplying rental equipment, including depreciation, repairs specifically performed on such rental equipment and freight. The principal elements of cost of sales for field service and other are labor, equipment depreciation and repair, equipment and vehicle lease expenses, fuel and supplies. Selling, general and administrative expenses (“SG&A”) are comprised of costs such as sales and marketing, engineering and product development, general corporate overhead, business development, compensation, employment benefits, insurance, information technology, safety and environmental, legal and professional.
Suppliers and Raw Materials
Forgings, tube and bar stock represent the principal raw materials used in the manufacture of our Pressure Control products and rental equipment. In addition, we require accessory items (such as elastomers, ring gaskets, studs and nuts) and machined components. The principal raw materials used by our Spoolable Technologies segment include tube, bar stock, steel strip and high-density polyethylene. We purchase a majority of our raw materials from vendors primarily located in the United States, China, India, Australia and Vietnam. We do not believe that we are overly dependent on any individual vendor to supply our required materials or services. The materials and services essential to our business are normally readily available and, where we use one or a few vendors as a source of any particular materials or services, we believe that we can, within a reasonable period of time, make satisfactory alternative arrangements in the event of an interruption of supply from any vendor. We believe our materials and services vendors have the capacity to meet additional demand should we require it, although at potentially higher costs and with extended deliveries.
Manufacturing
Our manufacturing and production facilities within our Pressure Control operating segment are located in Bossier City, Louisiana, Suzhou, China and Hai Duong, Vietnam. Although all facilities can produce our full range of products, our Bossier City facility has advanced production capabilities and is designed to support time-sensitive and rapid turnaround of made-to-order equipment, while our facilities in China and Vietnam are optimized for longer lead time orders and outsources its machining requirements. Excluding the new plant in Vietnam, the facilities are licensed to the latest American Petroleum Institute (“API”) 6A specification for wellheads and valves and API Q1 and ISO 9001:2015 quality management systems. The Bossier City facility also has the ability to perform frac rental equipment remanufacturing. Our production facility in China is configured to efficiently produce our range of pressure control products and components for less time-sensitive, higher-volume orders. The Suzhou facility assembles and tests finished and semi-finished machined components before shipment to the United
4
Table of Contents
States, Australia and other international locations. Our Suzhou and Vietnam subsidiaries are wholly-owned, and the facilities are staffed by Cactus employees, which we believe is a key factor in sustaining high quality and dependable deliveries.
Our manufacturing facility within our Spoolable Technologies operating segment is located in Baytown, Texas. Using proprietary-designed manufacturing equipment, we produce pipe products in accordance with industry standards. Additionally, our Baytown facility utilizes advanced Computer Numeric Control machines dedicated to the precision manufacturing of the FlexSteel connectors. Our Baytown facility is licensed to the latest API 15S specification for spoolable reinforced plastic line pipe, API 17J specification for unbonded flexible pipe and adheres to certified API Q1 and ISO 9001:2015 quality management systems.
Trademarks and Patents
Trademarks are important to the marketing of our products. The Company has numerous trademarks registered with the U.S. Patent and Trademark Office as well as foreign trademark offices and has also applied for registration of several other trademarks, which are still pending. Once registered, our trademarks can be renewed every 10 years as long as we are using them in commerce. We also seek to protect our technology through the use of patents, which affords us 20 years of protection of our proprietary inventions and technology. We have been awarded U.S. patents and patents in foreign jurisdictions while still having additional patent applications pending. We also rely on trade secret protection for our confidential and proprietary information. To protect our information, we customarily enter into confidentiality agreements with our employees and suppliers. There can be no assurance, however, that others will not independently obtain similar information or otherwise gain access to our trade secrets.
Cyclicality
We are substantially dependent on conditions in the oil and gas industry, including the level of exploration, development and production activity of, and the corresponding capital spending by, oil and natural gas exploration and production companies. The level of exploration, development and production activity is directly affected by trends in oil and natural gas prices, which have historically been volatile, and by the availability of capital and the associated capital spending discipline exercised by customers in response to existing and anticipated prices of crude oil and natural gas. Declines, as well as anticipated declines, in oil and gas prices could negatively affect the level of these activities and capital spending, which could adversely affect demand for our products and services and, in certain instances, result in the cancellation, modification or rescheduling of existing and expected orders and the ability of our customers to pay us for our products and services. These factors could have an adverse effect on our revenue and profitability.
Seasonality
Our business is not significantly impacted by seasonality, although our fourth quarter has historically been impacted by holidays and our customers’ budget cycles. These factors can lead to lower activity in our three revenue categories as well as lower margins, particularly in field services due to reduced labor utilization.
Customers
We serve over 300 customers representing private operators, publicly-traded independents, majors and other companies with operations in the key U.S. oil and gas producing basins as well as in Australia, Canada, the Middle East and other international locations. For the years ended December 31, 2025, 2024, and 2023 one customer represented 17%, 15% and 10%, respectively, of total Company revenues, with both operating segments reporting revenues with the customer.
Competition
The markets in which we operate are highly competitive. In the Pressure Control segment, we believe we are one of the largest suppliers of wellheads used in the United States. We compete with Vault, divisions of SLB and TechnipFMC, and a large number of other companies. We believe the rental market for frac stacks and related flow control equipment is more fragmented than the wellhead product market, and we do not believe any individual company represents more than 20% of the U.S. market. In the Spoolable Technologies segment, we compete with companies who offer spoolable products, including Baker Hughes, Mattr, NOV and select other companies, as well as companies who offer traditional steel line pipe, including Tenaris, Vallourec, and a large number of other line pipe manufacturers and distributors.
We believe the competitive factors in the markets we serve include technical features, equipment availability, work force competency, efficiency, safety record, reputation, continuity of management, and price. Additionally, projects are often
5
Table of Contents
awarded on a bid basis, which tends to create a highly competitive environment. While we seek to be competitive in our pricing, we believe many of our customers elect to work with us based on product performance, features, safety and availability, as well as the quality of our people, equipment and services. We seek to differentiate ourselves from our competitors by timely delivering the highest‑quality services and equipment possible, coupled with superior execution and operating efficiency in a safe working environment.
Environmental, Health and Safety Regulation
We are subject to stringent governmental laws and regulations, both in the United States and other countries, pertaining to protection of the environment and occupational safety and health. Compliance with environmental legal requirements in the United States at the federal, state or local levels may require acquiring permits to conduct regulated activities, incurring capital expenditures to limit or prevent emissions, discharges and any unauthorized releases, and complying with stringent practices to handle, recycle and dispose of certain wastes. These laws and regulations include, among others:
•the Federal Water Pollution Control Act (the “Clean Water Act”);
•the Clean Air Act;
•the Comprehensive Environmental Response, Compensation and Liability Act;
•the Resource Conservation and Recovery Act;
•the Occupational Safety and Health Act; and
•national and local environmental protection laws in Australia, China, Canada and the Middle East.
New, modified or stricter enforcement of environmental laws and regulations could be adopted or implemented that may significantly increase our compliance costs, pollution mitigation costs, or the cost of any remediation of environmental contamination that may become necessary, and these costs could be material. Our customers are also subject to most, if not all, of the same laws and regulations relating to environmental protection and occupational safety and health in the United States and in foreign countries where we operate. Consequently, to the extent these environmental compliance costs, pollution mitigation costs or remediation costs are incurred by our customers, those customers could elect to delay, reduce or cancel drilling, exploration or production programs, which could reduce demand for our products and services and, as a result, have a material adverse effect on our business, financial condition, results of operations, or cash flows. Consistent with our quality assurance and Health, Safety & Environment (“HSE”) principles, we have established proactive environmental and worker safety policies in the United States and foreign countries for the management, handling, recycling or disposal of chemicals and gases and other materials and wastes resulting from our operations. Substantial fines and penalties can be imposed and orders or injunctions limiting or prohibiting certain operations may be issued in connection with any failure to comply with laws and regulations relating to worker health and safety.
Licenses and Certifications. Our manufacturing facility in Bossier City, Louisiana, our production facility in Suzhou, China and our service center in Brendale, Australia are currently licensed by the API to monogram manufactured products in accordance with API 6A, 21st Edition product specification for both wellheads and valves while the quality management system is certified to API Q1, 10th Edition and ISO 9001:2015. Cactus has also developed an API Q2 program specific to our Pressure Control service business. We have and are implementing the API Q2 Quality Management System at select service locations to reduce well site non-productive time, improve service tool reliability and enhance customer satisfaction and retention.
Our manufacturing facility in Baytown, Texas also holds API licenses, allowing us to monogram our FlexSteel products in strict accordance with industry-leading standards. Specifically, we adhere to the API 15S 3rd Edition product specification for spoolable reinforced plastic line pipe and the API 17J 5th Edition product specification for unbonded flexible pipe. The FlexSteel quality management system is certified to API Q1, 9th Edition, and ISO 9001:2015. We also hold product conformity certifications for our Spoolable Technologies segment from ICONTEC, covering Latin and South American standards for API 15S and 17J, and ABNT, endorsing Brazilian production conformity to API 15S and 17J.
The API licenses and certifications expire every three years and are renewed upon successful completion of annual audits. Our current licenses and certifications are published on our website at www.CactusWHD.com. Information relating to the Pressure Control segment is available under the “Quality” section of the Cactus Wellhead webpage, and information relating to the Spoolable Technologies segment is available under the “HSEQ” section of the FlexSteel webpage. API’s standards are subject to revision, however, and there is no guarantee that future amendments or substantive changes to the standards would not require us to modify our operations or manufacturing processes to meet the new standards. Doing so may materially affect our operational costs. We also cannot guarantee that changes to the standards would not lead to the rescission
6
Table of Contents
of our licenses should we be unable to make the changes necessary to meet the new standards. Loss of our API licenses could materially affect demand for these products.
Hydraulic Fracturing. Most of our customers utilize hydraulic fracturing in their operations. Environmental concerns have been raised regarding the potential impact of hydraulic fracturing and the resulting wastewater disposal on underground water supplies and seismic activity. These concerns have led to several regulatory and governmental initiatives in the United States to restrict the hydraulic fracturing process, which could have an adverse impact on our customers’ completions or production activities. Although we do not conduct hydraulic fracturing, certain of our products are used in hydraulic fracturing. Increased regulation and attention given to the hydraulic fracturing process could lead to greater opposition to oil and gas production activities using hydraulic fracturing techniques. Since 2021, the Texas Railroad Commission, which regulates the state’s oil and gas industry, has suspended the use of deep wastewater disposal wells in certain areas of oil-producing counties in West Texas. The suspensions are intended to mitigate earthquakes thought to be caused by the injection of waste fluids, including saltwater, that are a byproduct of hydraulic fracturing into disposal wells. The bans require oil and gas production companies to find other options to handle the wastewater, which may include piping or trucking it longer distances to other locations not under the bans. In addition, the Texas Railroad Commission has overseen the development of well-operator-led response plans to reduce injection volumes in other portions of West Texas in order to reduce seismicity in these areas. The adoption of new laws or regulations at the federal, state, local or foreign level imposing reporting obligations on, or otherwise limiting, delaying or banning, the hydraulic fracturing process or other processes on which hydraulic fracturing and subsequent hydrocarbon production relies, such as water disposal, could make it more difficult to complete oil and natural gas wells. Further, it could increase our customers’ costs of compliance and doing business, and otherwise adversely affect the hydraulic fracturing services for which they contract, which could negatively impact demand for our products.
Climate Change. Local, state, national and foreign governments and agencies continue to evaluate, and in some instances adopt, climate-related legislation and other regulatory initiatives that would restrict emissions of greenhouse gases. Changes in environmental requirements related to greenhouse gases, climate change and alternative energy sources may negatively impact demand for our services. Oil and natural gas exploration and production may decline as a result of environmental requirements, including land use policies responsive to environmental concerns.
Because our business depends on the level of activity in the oil and natural gas industry, existing or future laws, regulations, treaties or international agreements related to greenhouse gases and climate change, may reduce demand for oil and natural gas and could have a negative impact on our business. Likewise, such restrictions may result in additional compliance obligations that could have a material adverse effect on our business, consolidated results of operations and consolidated financial position. In addition, our business could be negatively impacted by initiatives to address greenhouse gases and climate change and incentives to conserve energy or use alternative energy sources.
Insurance and Risk Management
We rely on customer indemnifications and third‑party insurance as part of our risk mitigation strategy. However, our customers may be unable to satisfy indemnification claims against them or are not always willing to provide adequate indemnifications. Additionally, state laws may not always allow indemnifications we obtain or extend to be enforced. We indemnify our customers against certain claims and liabilities resulting or arising from our provision of goods or services to them. Our insurance may not be sufficient to cover any particular loss or may not cover all losses. We carry a variety of insurance coverages for our operations, and we are partially self‑insured for certain claims, in amounts that we believe to be customary and reasonable. Historically, insurance rates have been subject to various market fluctuations that may result in less coverage, increased premium costs, or higher deductibles or self‑insured retentions.
Our insurance includes coverage for commercial general liability, damage to our real and personal property, damage to our mobile equipment, pollution liability, workers’ compensation and employer’s liability, auto liability, foreign package policy, commercial crime, fiduciary liability employment practices, cargo, excess liability, directors and officers’ and cyber insurance. We also maintain a partially self-insured medical plan that utilizes specific and aggregate stop loss limits. Our insurance includes various coverage limitations, policy limits and deductibles or self‑insured retentions, which must be met prior to, or in conjunction with, any recovery.
Human Capital Management
As of December 31, 2025, we employed over 1,500 people worldwide, of which over 100 were employed outside of the United States, mainly in Australia, China and Vietnam. We are not a party to any collective bargaining agreements and have not experienced any strikes or work stoppages. We consider our relations with our workforce to be strong.
7
Table of Contents
Our success is intrinsically tied to our ability to attract, retain, and inspire a diverse and talented team across all levels of our organization. This includes our global workforce, executive leadership, and other key personnel. Operating in a highly competitive industry, we have developed and implemented targeted strategies, objectives, and metrics for recruitment and retention. These initiatives are integral to our overall business management approach, contributing to our ability to maintain high retention rates among key managers and associates while fostering a dynamic and motivated workforce.
Recruiting. Our talent strategy focuses on attracting, recognizing, developing, and retaining top-performing individuals. To identify and secure exceptional talent, we actively encourage and reward employee referrals, leverage multiple social media platforms, and participate in regional job fairs. Additionally, we build strategic partnerships with educational institutions across the United States and collaborate with local workforce commissions. These efforts ensure we maintain a diverse and highly skilled candidate pool in every region where we operate.
Training and Development. We are deeply committed to the training and development of our associates, with a special emphasis on those in field, plant, and branch operations. Our comprehensive internal training programs are designed to enhance and monitor technical and safety skills while fostering growth in key areas such as safety practices, corporate and personal responsibility, product knowledge, behavioral development, and ethical conduct.
To support career advancement, our development plans equip individuals with the technical expertise needed to perform their roles with the highest levels of safety and precision. For associates requiring specialized skills, knowledge, or certifications, we provide access to external training opportunities tailored to their professional growth.
We believe that our unwavering focus on training and development not only fosters a safer work environment but also creates pathways for internal promotions, boosts associate morale, and strengthens retention across the organization.
Workplace Culture. We believe our workplace culture is fundamental to our success, driving innovation, creativity, and sustainable growth. Our commitment is to nurture a workplace culture that values every individual, and empowers everyone to contribute their unique perspectives.
We are dedicated to fostering an environment where discrimination has no place. This commitment is reflected in every aspect of our business—from recruitment and promotion practices to associate development initiatives and supplier partnerships. Our workforce comprises a diverse associate group, with approximately 12% women and approximately 49% of our workforce representing a minority population. By cultivating a diverse environment, we strengthen our organization, enrich our workplace culture, and ensure long-term success.
Compensation and Benefits. We provide comprehensive compensation and benefits programs thoughtfully designed to address the needs of our associates and their families. Our approach goes beyond offering competitive salaries and wages, incorporating a wide range of benefits to promote financial security, health, wellness, and professional growth.
Our financial benefits include annual bonuses and retirement plans, such as a 401(k), to help associates build long-term financial stability. We also utilize targeted equity-based grants with vesting conditions to support the retention of key personnel, aligning their success with the Company's growth.
To promote health and wellness, we offer competitive healthcare and insurance options, including health savings accounts partially funded by the Company and standard flexible spending accounts. Associates also have access to company-sponsored long- and short-term disability coverage, accident and critical illness insurance, and resources to support overall well-being.
Recognizing the importance of work-life balance, we provide paid time off, family leave, and paid maternity and paternity leave. Our commitment to supporting families extends further with access to family care resources and personal legal services insurance. Additionally, associate assistance programs are available to help navigate personal and professional challenges.
We also invest in our associates' professional development by offering tuition reimbursement in certain circumstances, enabling continued growth and skill development.
Through this holistic approach to compensation and benefits, we aim to create a supportive and empowering environment that fosters associate satisfaction, enhances retention, and ensures the long-term success of both our associates and the organization.
Health and Safety. Our health and safety programs are designed around global standards with appropriate variations addressing the multiple jurisdictions and regulations, specific hazards and unique working environments of our manufacturing
8
Table of Contents
and production facilities, service centers and headquarters. We require each location to conduct regular safety evaluations to verify that expectations for safety program procedures and training are being met. We also engage in third-party conformity assessments of our HSE processes to determine adherence to our HSE management system and to global health and safety standards. We monitor our Occupational Safety and Health Administration Total Recordable Incident Rate (“TRIR”) to assess our operation’s health and safety performance. TRIR is defined as the number of incidents per 100 full-time employees that have resulted in a recordable injury or illness in the pertinent period. During fiscal year 2025, our Pressure Control segment reported a TRIR of 1.49, which compares to 0.81 in 2024, with no work-related fatalities in either year. Our Spoolable Technologies segment reported a TRIR of 0.79 for fiscal year 2025, compared to 1.26 in 2024, with no work-related fatalities. Based on the most recent statistics available from the International Association of Drilling Contractors, our TRIR statistics are in line with the industry average.
We are committed to the health, safety and wellness of our associates. We provide our associates and their families access to various flexible and convenient health and wellness programs. These programs include benefits that offer protection and security to have peace of mind concerning events that may require time away from work or impact their financial well-being. These tools also support their physical and mental health by providing resources to improve or maintain their health status.
Executive Officers and Directors
The following tables set forth certain information regarding our Executive Officers and Directors as of February 25, 2026:
Information About Our Executive Officers
| Name | Position | |||||||
| Scott Bender | Chief Executive Officer, Chairman of the Board and Director | |||||||
| Joel Bender | President and Director | |||||||
| Steven Bender | Chief Operating Officer | |||||||
| Stephen Tadlock | Executive Vice President, Chief Executive Officer of the Spoolable Technologies segment, and Chief Executive Officer of Cactus International | |||||||
Jay A. Nutt | Executive Vice President and Chief Financial Officer | |||||||
| William Marsh | Executive Vice President, General Counsel and Corporate Secretary | |||||||
Information About Our Board of Directors
| Name | Position | |||||||
| Scott Bender | Chief Executive Officer, Chairman of the Board and Director of Cactus, Inc. | |||||||
| Joel Bender | President and Director of Cactus, Inc. | |||||||
| Melissa Law | President of Global Operations for Tate & Lyle | |||||||
| Michael McGovern | Former Executive Chairman of the board of directors of Superior Energy Services, Inc. | |||||||
| John (Andy) O’Donnell | Former Vice President and executive officer of Baker Hughes Incorporated | |||||||
| Gary Rosenthal | Partner, The Sterling Group, L.P. | |||||||
| Bruce Rothstein | Former Member and co-founder of Cadent Energy Partners LLC | |||||||
| Alan Semple | Director of Teekay Tankers Ltd | |||||||
| Tym Tombar | Managing Director and Co-Founder of Arcadius Capital Partners | |||||||
Available Information
Our principal executive offices are located at 920 Memorial City Way, Suite 300, Houston, TX 77024, and our telephone number at that address is (713) 626‑8800. Our website address is www.CactusWHD.com. Our periodic reports and other information filed with or furnished to the SEC, including our Form 10-Ks, Form 10-Qs and Form 8-Ks, as well as amendments to such filings, are available free of charge through our website, as soon as reasonably practicable after those reports and other information are electronically filed with or furnished to the SEC. Information on our website or any other website is not incorporated by reference into this Annual Report and does not constitute a part of this Annual Report.
9
Table of Contents
Item 1A. Risk Factors
Investing in our Class A common stock involves risks. You should carefully consider the information in this Annual Report, including the matters addressed under “Cautionary Statement Regarding Forward‑Looking Statements,” and the following risks before making an investment decision. Our business, results of operations and financial condition could be materially and adversely affected by any of these risks. Additional risks or uncertainties not currently known to us, or that we deem immaterial, may also have an effect on our business, results of operations and financial condition. The trading price of our Class A common stock could decline due to any of these risks, and you may lose all or part of your investment.
Risks Related to the Oilfield Services Industry and Our Business
Demand for our products and services depends on oil and gas industry activity and customer expenditure levels, which are directly affected by trends in the supply of and demand for and price of crude oil and natural gas and availability of capital.
Demand for our products and services depends primarily upon the general level of activity in the oil and gas industry, including the number of drilling rigs in operation, the number of oil and gas wells being drilled, the depth, lateral length and drilling conditions of these wells, the volume of production, the number of well completions and the level of well remediation activity, the number of wells put into production, the number of wells drilled but uncompleted, the impact of actions taken by the Organization of Petroleum Exporting Countries and other oil and gas producing countries ("OPEC+") affecting the global supply of oil and gas and the capital spending by oil and gas exploration and production companies. Oil and gas activity is in turn heavily influenced by, among other factors, current and anticipated oil and natural gas prices locally and worldwide, which have historically been volatile. Declines, as well as anticipated declines, in oil and gas prices could negatively affect the level of these activities and capital spending, which could adversely affect demand for our products and services and, in certain instances, result in the cancellation, modification or rescheduling of existing and expected orders and the ability of our customers to pay us for our products and services. These factors could have an adverse effect on our results of operations, financial condition and cash flows.
The oil and gas industry is cyclical and has historically experienced periodic downturns, which have been characterized by diminished demand for our products and services and downward pressure on the prices we charge. These downturns cause exploration and production ("E&P") companies to reduce their capital budgets and drilling activity. Any future downturn or expected downturn could result in a significant decline in demand for oilfield services and adversely affect our business, results of operations and cash flows.
U.S. drilling and completion activity could be adversely affected by any significant constraints in equipment, labor or takeaway capacity in the regions in which we operate.
U.S. drilling and completion activity may be impacted by, among other things, the availability and cost of ancillary equipment and services, pipeline capacity, and material and labor availability and costs. Should significant changes in activity occur, there could be concerns over availability of the equipment, materials and labor required to drill and complete a well, together with the ability to move the produced oil and natural gas to market. Should significant constraints develop that materially impact the efficiency and economics of oil and gas producers, U.S. drilling and completion activity could be adversely affected. This would have an adverse impact on the demand for the products we sell and rent, which could have a material adverse effect on our business, results of operations and cash flows.
We may be unable to employ a sufficient number of skilled and qualified workers to sustain or expand our current operations.
The delivery of our products and services requires personnel with specialized skills and experience. Our ability to be productive and profitable will depend upon our ability to attract and retain skilled workers. In addition, our ability to expand our operations depends in part on our ability to increase the size of our skilled labor force. The demand for skilled workers is high and the cost to attract and retain qualified personnel has remained elevated. During industry downturns, skilled workers may leave the industry, reducing the availability of qualified workers when conditions improve. In addition, a significant increase in the wages paid by competing employers both within and outside of our industry could result in increases in the wage rates that we must pay. If we are not able to employ and retain skilled workers, our ability to respond quickly to customer demands or strong market conditions may inhibit our growth, which could have a material adverse effect on our business, results of operations and cash flows.
10
Table of Contents
Our business is dependent on the continuing services of certain of our key managers and employees.
We depend on key executives and management personnel. Our future plans depend in part on our ability to identify, retain, develop and/or recruit suitable successors to senior management. The loss of any key executives and/or managers could adversely impact our business. The loss of qualified associates or an inability to retain and motivate additional highly‑skilled associates required for the operation and expansion of our business could hinder our ability to successfully maintain and expand our market share.
Political, regulatory, economic and social disruptions in the countries in which we conduct business and globally could adversely affect our business or results of operations.
In addition to our facilities in the United States, we operate a production facilities in China and, Vietnam, and we have facilities in Australia and Canada that sell and rent equipment as well as provide parts, repair services and field services associated with installation. Additionally, we provide rental and field service operations in the Middle East. Instability and unforeseen changes in any of the markets in which we conduct business could have an adverse effect on the demand for, or supply of, our business, results of operations and cash flows. We have also expanded our operations and footprint in the Middle East as a result of the Baker Hughes Transaction.
We are dependent on a relatively small number of customers in a single industry. The loss of an important customer could adversely affect our results of operations and financial condition.
Our customers are engaged in the oil and natural gas E&P business primarily in the United States, but also in Australia, Canada, the Middle East and other select international markets. Historically, we have been dependent on a relatively small number of customers for our revenues. Our business, results of operations and financial position could be materially adversely affected if an important customer ceases to engage us for our services on favorable terms, or at all, or fails to pay or delays paying us significant amounts of our outstanding receivables for product and services provided. Additionally, the E&P industry has seen consolidation activity, which may continue. Changes in ownership of our customers may result in the loss of, or reduction in, business from those customers which could materially and adversely affect our business, results of operations and cash flows.
Delays in obtaining, or inability to obtain or renew, permits or authorizations by our customers for their operations could impair our business.
Our customers are required to obtain permits or authorizations from one or more governmental agencies or other third parties to perform drilling and completion activities, including hydraulic fracturing. Such permits or approvals are typically required by state agencies but can also be required by federal and local governmental agencies or other third parties. As with most permitting and authorization processes, there is a degree of uncertainty as to whether a permit will be granted, the time it will take for a permit or approval to be issued and the conditions which may be imposed in connection with the granting of the permit. In some jurisdictions, certain regulatory authorities have delayed or suspended the issuance of permits or authorizations while the potential environmental impacts associated with issuing such permits can be studied and appropriate mitigation measures evaluated. In Texas, rural water districts have begun to impose restrictions on water use and may require permits for water used in drilling and completion activities. Oil and gas leasing on public land remains politically fraught and federal land available for oil and gas leasing could be significantly reduced due to environmental and climate concerns. The effects of these developments or other initiatives to reform the federal leasing process could result in additional restrictions or limitations on the issuance of federal leases and permits for drilling on public lands. Permitting, authorization or renewal delays, the inability to obtain new permits or the revocation of current permits could impact our customers’ operations and cause a loss of revenue and potentially have a material adverse effect on our business, results of operations and cash flows.
Competition within the oilfield services industry may adversely affect our ability to market our services.
The oilfield services industry is highly competitive and fragmented and includes numerous companies capable of competing effectively in our markets, including several large companies that possess substantially greater financial and other resources than we do. Consolidation of our competitors and the entry of new competitors could result in a further increase in competition. The amount of equipment available may exceed demand, which could result in active price competition. Many contracts are awarded on a bid basis, which may further increase competition based primarily on price. In addition, adverse market conditions reduce demand for well servicing equipment, which results in excess equipment and lower utilization rates. If market conditions deteriorate or if adverse market conditions persist, the prices we are able to charge and utilization rates may decline. Any significant future increase in overall market capacity for the products, rental equipment or services that we offer could adversely affect our business, results of operations and cash flows.
11
Table of Contents
New technology may cause us to become less competitive.
The oilfield services industry is subject to the introduction of new drilling and completions techniques and services using new technologies, some of which may be subject to patent or other intellectual property protections. Although we believe our equipment and processes currently give us a competitive advantage in the U.S., as competitors and others use or develop new or comparable technologies in the future, we may lose market share or be placed at a competitive disadvantage. Further, we may face competitive pressure to develop, implement, license or acquire certain new technologies at a substantial cost. Some of our competitors have greater financial, technical and personnel resources that may allow them to enjoy various competitive advantages in the development and implementation of new technologies. We cannot be certain that we will be able to continue to develop and implement new technologies or products. Limits on our ability to develop, bring to market, effectively use and implement new and emerging technologies may have a material adverse effect on our business, results of operations and cash flows, including a reduction in the value of assets replaced by new technologies.
Increased costs, inflation, increased transit times, changes in global trade policies, increased tariffs, or lack of availability, of raw materials and other components may result in increased operating expenses and adversely affect our results of operations and cash flows.
Our ability to source and transport raw materials and components, such as steel, tube and bar stock, forgings and machined components is critical to our ability to successfully compete. Among other things, the conflicts in Ukraine and the Middle East may result in longer transit times, higher costs and reduced availability of raw materials and components used in our wide variety of products and systems. Further union port labor related disruptions could also result in increased transit times and costs. Transit times through and availability of the Panama Canal may be impacted by weather patterns and political tensions among the US, Panama and China.
Tariffs, and related policy changes implemented by the U.S. government, have created volatility in the oil and gas markets and will likely result in higher operating expenses and potentially lower demand for our products, which could adversely affect our results of operations and cash flows. U.S. tariff increases on imports of steel, aluminum, and derivative products worldwide may impact our costs and profitability. Additionally, the imposition of high tariffs on products from China, as well as varying levels of tariffs on products from India and Vietnam could have an unfavorable impact on our supply chain diversification plans. Further, should our current suppliers be unable to provide the necessary raw materials or components or otherwise fail to deliver materials and components timely and, in the quantities required, as a result of global trade policies or other reasons, resulting delays in the provision of products or services to our customers could have a material adverse effect on our business, results of operations and cash flows. In addition, our results of operations may be adversely affected by further rising costs to the extent we are unable to partially recoup them from our customers. There is no assurance that we will be able to continue to purchase and move these materials on a timely basis or at commercially viable prices, nor can we be certain of the impact of changes to tariffs, litigation related to tariffs and future legislation that may impact trade with China or other countries. Further, unexpected changes in the size of regional and/or product markets, particularly for short lead‑time products, could affect our results of operations and cash flows.
We design, manufacture, sell, rent and install equipment that is used in oil and gas E&P activities, which may subject us to liability, including claims for personal injury, property damage and environmental contamination should such equipment fail to perform to specifications.
We provide products and systems to customers involved in oil and gas exploration, development and production. Some of our equipment is designed to operate in high‑temperature and/or high‑pressure environments, and some equipment is designed for use in hydraulic fracturing operations. We also provide parts, repair services and field services associated with installation at all our facilities and service centers in the United States and Australia, as well as at customer sites, including sites in the Middle East. Because of applications to which our products and services are exposed, particularly those involving high pressure environments, a failure of such equipment, or a failure of our customers to maintain or operate the equipment properly, could cause damage to the equipment, damage to the property of customers and others, personal injury and environmental contamination and could lead to a variety of claims against us that could have an adverse effect on our business, results of operations and cash flows.
We indemnify our customers against certain claims and liabilities resulting or arising from our provision of goods or services to them. In addition, we rely on customer indemnifications, generally, and third‑party insurance as part of our risk mitigation strategy. However, courts may limit indemnity claims and our insurance may not be adequate to cover our liabilities. In addition, our customers may be unable to satisfy indemnification claims against them. Further, insurance companies may refuse to honor their policies, or insurance may not generally be available in the future, or if available, premiums may not be commercially justifiable. We could incur substantial liabilities and damages that are either not covered by customer indemnities
12
Table of Contents
or insurance or that are in excess of policy limits, or incur liability at a time when we are not able to obtain liability insurance. Such potential liabilities could have a material adverse effect on our business, results of operations and cash flows.
Our customers require us to be licensed or approved by industry groups such as the American Petroleum Institute ("API") and the International Organization for Standardization ("ISO"). The failure to obtain and maintain such licenses and/or approvals could have a material adverse effect on our results of operations, financial condition and cash flows.
We currently hold licenses from API and ISO that are required by our customers. Maintaining those licenses are subject to continually meeting the standards required for those licenses, including periodic audit by the applicable organization. If we are not able to continue to hold such licenses and/or approvals, we could potentially no longer be able to provide goods and services to many of our customers.
Our operations are subject to hazards inherent in the oil and natural gas industry, which could expose us to substantial liability and cause us to lose customers and substantial revenue.
Risks inherent in our industry include the risks of equipment defects, installation errors, the presence of multiple contractors at the wellsite over which we have no control, vehicle accidents, fires, explosions, blowouts, surface cratering, uncontrollable flows of gas or well fluids, pipe or pipeline failures, abnormally pressured formations and various environmental hazards such as oil spills and releases of, and exposure to, hazardous substances. For example, our operations are subject to risks associated with hydraulic fracturing, including any mishandling, surface spillage or potential underground migration of fracturing fluids, including chemical additives. The occurrence of any of these events could result in substantial losses to us due to injury or loss of life, severe damage to or destruction of property, natural resources and equipment, pollution or other environmental damage, clean‑up responsibilities, regulatory investigations and penalties, suspension of operations and repairs required to resume operations. The cost of managing such risks may be significant. The frequency and severity of such incidents will affect operating costs, insurability and relationships with customers, employees and regulators. In particular, our customers may elect not to purchase our products or services if they view our environmental or safety record as unacceptable, which could cause us to lose customers and substantial revenues, leading to a material adverse effect on our business, results of operations and cash flows.
Oilfield anti-indemnity provisions enacted by many states may restrict or prohibit a party’s indemnification of us.
We typically enter into agreements with our customers governing the provision of our services, which usually include certain indemnification provisions for losses resulting from operations. Such agreements may require each party to indemnify the other against certain claims regardless of the negligence or other fault of the indemnified party; however, many states place limitations on contractual indemnity agreements, particularly agreements that indemnify a party against the consequences of its own negligence. Furthermore, certain states, including Louisiana, New Mexico, Texas, and Wyoming, have enacted statutes generally referred to as “oilfield anti-indemnity acts” expressly prohibiting certain indemnity agreements contained in or related to oilfield services agreements. Such oilfield anti-indemnity acts may restrict or void a party’s indemnification of us, which could have a material adverse effect on our business, results of operations and cash flows.
Our operations require us to comply with various domestic and international regulations, violations of which could have a material adverse effect on our results of operations, financial condition and cash flows.
We are exposed to a variety of federal, state, local and international laws and regulations relating to matters such as environmental, workplace, health and safety, labor and employment, customs and tariffs, export and re-export controls, economic sanctions, currency exchange, bribery and corruption and taxation. These laws and regulations are complex, frequently change and have tended to become more stringent over time. They may be adopted, enacted, amended, enforced or interpreted in such a manner that the incremental cost of compliance could adversely impact our business, results of operations and cash flows.
In addition to our U.S. operations, we have operations in, among other countries, China, Australia, Canada, Vietnam and the Middle East. Our operations outside of the United States require us to comply with numerous anti‑bribery and anti‑corruption regulations. The U.S. Foreign Corrupt Practices Act, among others, applies to us and our operations. Our policies, procedures and programs may not always protect us from reckless or criminal acts committed by our associates or agents, and severe criminal or civil sanctions may be imposed as a result of violations of these laws. We are also subject to the risks that our associates and agents outside of the United States may fail to comply with applicable laws.
13
Table of Contents
In addition, we import raw materials, semi‑finished goods, and finished products into, among other countries, the United States, China, Australia, Canada, Vietnam, India and the Middle East for use in such countries or for manufacturing and/or finishing for re‑export and import into another country for use or further integration into equipment or systems. Most movement of raw materials, semi‑finished or finished products involves imports and exports. As a result, compliance with multiple trade sanctions, embargoes and import/export laws and regulations pose an ongoing challenge and risk to us since a portion of our business is conducted outside of the United States through our subsidiaries. Our failure to comply with these laws and regulations could materially affect our business, results of operations and cash flows.
Compliance with environmental laws and regulations may adversely affect our business and results of operations.
Environmental laws and regulations in the United States and foreign countries affect the equipment, systems and services we design, market and sell, as well as the facilities where we manufacture and produce our equipment and systems. For example, we may be affected by such laws as the Resource Conservation and Recovery Act, the Comprehensive Environmental Response, Compensation, and Liability Act, the Clean Water Act, the Clean Air Act and the Occupational Safety and Health Act of 1970. Further, our customers may be subject to a range of laws and regulations governing hydraulic fracturing, drilling and greenhouse gas emissions.
We are required to invest financial and managerial resources to comply with environmental laws and regulations. Failure to comply with these laws and regulations may result in the assessment of administrative, civil and criminal penalties, the imposition of remedial obligations, or the issuance of orders enjoining operations. These laws and regulations, as well as the adoption of other new laws and regulations affecting our operations or the exploration, production and transportation of crude oil and natural gas by our customers, could adversely affect our business and operating results by increasing our costs of compliance, increasing the costs of compliance and costs of doing business for our customers, limiting the demand for our products and services or restricting our operations. Increased regulation or a move away from the use of fossil fuels caused by additional regulation could also reduce demand for our products and services, leading to a material adverse effect on our business, results of operations and cash flows.
Existing or future laws and regulations related to greenhouse gases and climate change and related public and governmental initiatives and additional compliance obligations could have a material adverse effect on our business, results of operations, prospects, and financial condition.
Changes in environmental requirements related to greenhouse gas emissions may negatively impact demand for our products and services. Oil and natural gas E&P activity may decline as a result of environmental requirements, including land use policies and other actions to restrict oil and gas leasing and permitting in response to environmental and climate change concerns. Federal, state, and local agencies continue to evaluate climate-related legislation and other regulatory initiatives that would restrict emissions of greenhouse gases in areas in which we conduct business. Because our business depends on the level of activity in the oil and natural gas industry, existing or future laws and regulations related to greenhouse gases could have a negative impact on our business if such laws or regulations reduce demand for oil and natural gas. Likewise, such laws or regulations may result in additional compliance obligations with respect to the release, capture, sequestration, and use of greenhouse gases. These additional obligations could increase our costs and have a material adverse effect on our business, results of operations, prospects, and financial condition. Additional compliance obligations could also increase costs of compliance and costs of doing business for our customers, thereby reducing demand for our products and services. Finally, increased frequency and severity of storms, droughts, floods, wildfires and other climatic events could have an adverse impact on our operations.
Many of our customers utilize hydraulic fracturing in their operations. Environmental concerns have been raised regarding the potential impact of hydraulic fracturing on underground water supplies and seismic activity. These concerns have led to several regulatory and governmental initiatives in the United States to restrict the hydraulic fracturing process, which could have an adverse impact on our customers’ completions or production activities. Although we do not conduct hydraulic fracturing, our products are used in hydraulic fracturing. Increased regulation and attention given to the hydraulic fracturing process could lead to greater opposition to oil and gas production activities using hydraulic fracturing techniques. Since 2021, the Texas Railroad Commission, which regulates the state’s oil and gas industry, has suspended the use of deep wastewater disposal wells in certain areas of four oil-producing counties in West Texas. The suspensions are intended to mitigate earthquakes thought to be caused by the injection of waste fluids, including saltwater, that are a byproduct of hydraulic fracturing into disposal wells. The bans require oil and gas production companies to find other options to handle the wastewater, which may include piping or trucking it longer distances to other locations not under the ban. In addition, the Texas Railroad Commission has overseen the development of well-operator-led response plans to reduce injection volumes in other portions of West Texas to reduce seismicity in these areas. The adoption of new laws or regulations at the federal, state, local or foreign level imposing reporting obligations on, or otherwise limiting, delaying or banning, the hydraulic fracturing process or
14
Table of Contents
other processes on which hydraulic fracturing and subsequent hydrocarbon production relies, such as water disposal, could make it more difficult to complete oil and natural gas wells. Further, it could increase our customers’ costs of compliance and doing business, and otherwise adversely affect the hydraulic fracturing services they perform, which could negatively impact demand for our products, leading to a material adverse effect on our business, results of operations and cash flows.
Increasing attention by the public and government agencies to climate change and environmental, social and governance (“ESG”) matters could also negatively impact demand for our products and services. Increasing attention is being given to corporate activities related to ESG in public discourse and the investment community. A number of advocacy groups, both domestically and internationally, have campaigned for governmental and private action to promote change at public companies related to ESG matters, including through the investment and voting practices of investment advisers, public pension funds, universities and other members of the investing community. These activities include increasing attention and demands for action related to climate change and energy rebalancing matters, such as promoting the use of substitutes to fossil fuel products and encouraging the divestment of fossil fuel equities, as well as pressuring lenders and other financial services companies to limit or curtail activities with fossil fuel companies. If this were to continue, it could have a material adverse effect on the valuation of our Class A common stock and our ability to access equity capital markets.
In addition, our business could be impacted by initiatives to address greenhouse gases and climate change and public pressure to conserve energy or use alternative energy sources. State or federal initiatives to incentivize a shift away from fossil fuels could also reduce demand for hydrocarbons. Early in 2025, President Trump signed executive orders that, among other things, directed federal executive departments and agencies to initiate a regulatory freeze for certain rules, called upon the Environmental Protection Agency (the “EPA”) to submit a report on the continuing applicability of its endangerment finding for GHGs under the Clean Air Act and issue guidance on the “social cost of carbon” to consider whether such metric should be eliminated, and paused the disbursement of funds appropriated through the Inflation Reduction Act of 2022 and the Infrastructure Investments and Jobs Act. Additionally, on February 12, 2026, the EPA finalized its rescission of the 2009 Greenhouse Gas Endangerment Finding regarding greenhouse gas and all federal greenhouse gas emissions standards for vehicles and engines. However, future presidential administrations may pursue executive orders or rulemaking that would increase the amount of regulation.
The global outbreak of COVID-19 had, and similar pandemics in the future may have, an adverse impact on our business and operations.
The COVID-19 pandemic negatively affected our revenues and operations. We experienced, and if another pandemic was to occur, we may experience in the future, slowdowns or temporary idling of certain of our manufacturing and service facilities due to a number of factors, including implementing additional safety measures, testing of our team members, team member absenteeism and governmental orders. A prolonged closure could have a material adverse impact on our ability to operate our business and on our results of operations. We have also experienced, and if another pandemic was to occur, we could experience, disruption and volatility in our supply chain, which has resulted, and may continue to result, in increased costs for certain goods. Outbreaks of other pandemics or contagious diseases may in the future disrupt our operations, suppliers or facilities, result in increased costs for certain goods or otherwise impact us in a manner similar to the COVID-19 pandemic.
The ongoing conflicts in various parts of the world may affect our business and results of operations.
The ongoing conflicts in Venezuela, Iran, Ukraine and other countries in the Middle East could have effects on global macroeconomic conditions which could impact our business and results of operations. The conflicts are highly unpredictable and have resulted in volatility with oil and natural gas prices worldwide. Elevated energy prices could result in higher inflation worldwide, causing economic uncertainty in the oil and natural gas markets as well as the stock market, resulting in stock price volatility, foreign currency fluctuations and supply chain disruptions. These conditions could ultimately dampen demand for our goods and services by increasing the possibility of a recession. In addition, the conflicts could lead to increased cyberattacks or could aggravate other risk factors that we identify in our public filings. Additional conflicts in other parts of the world could have similar negative impacts on our business.
15
Table of Contents
Risks Related to Our Class A Common Stock
We are a holding company whose only material asset is our equity interest in Cactus Companies, and accordingly, we are dependent upon distributions from Cactus Companies to pay taxes, make payments under the Tax Receivable Agreement ("TRA") and cover our corporate and other overhead expenses and pay dividends to holders of our Class A Common Stock.
We are a holding company and have no material assets other than our equity interest in Cactus Companies. We have no independent means of generating revenue. To the extent Cactus Companies has available cash and subject to the terms of any current or future credit agreements or debt instruments, we intend to cause Cactus Companies to make (i) pro rata distributions to its unit holders, including us, in an amount at least sufficient to allow us to pay our taxes and to make payments under the TRA and (ii) non‑pro rata payments to us to reimburse us for our corporate and other overhead expenses. To the extent that we need funds and Cactus Companies or its subsidiaries are restricted from making such distributions or payments under applicable law or regulation or under the terms of any future financing arrangements, or are otherwise unable to provide such funds, our financial condition and liquidity could be materially adversely affected. In addition, our ability to pay dividends to holders of our Class A common stock depends on receipt of distributions from Cactus Companies.
Moreover, because we have no independent means of generating revenue, our ability to make payments under the TRA is dependent on the ability of Cactus Companies to make distributions to us in an amount sufficient to cover our obligations under the TRA. This ability, in turn, may depend on the ability of Cactus Companies’ subsidiaries to make distributions to it. The ability of Cactus Companies and its subsidiaries to make such distributions will be subject to, among other things, (i) the applicable provisions of Delaware law (or other applicable U.S. and foreign jurisdictions) that may limit the amount of funds available for distribution and (ii) restrictions in relevant debt instruments issued by Cactus Companies or its subsidiaries. To the extent that we are unable to make payments under the TRA for any reason, such payments will be deferred and will accrue interest until paid.
Cactus WH Enterprises has the ability to direct the voting of a significant percentage of the voting power of our common stock, and its interests may conflict with those of our other shareholders.
Holders of Class A common stock and Class B common stock vote together as a single class on all matters presented to our stockholders for their vote or approval, except as otherwise required by applicable law or our amended and restated certificate of incorporation. Cactus WH Enterprises owned approximately 12.1% of our voting power as of December 31, 2025. This concentration of ownership may limit stockholders’ ability to affect the way we are managed or the direction of our business. The interests of Cactus WH Enterprises with respect to matters potentially or actually involving or affecting us, such as future acquisitions, financings and other corporate opportunities and attempts to acquire us, may conflict with the interests of our other stockholders. The existence of significant stockholders may have the effect of deterring hostile takeovers, delaying or preventing changes in control or changes in management or limiting the ability of our other stockholders to approve transactions that they may deem to be in our best interests. Cactus WH Enterprises’ concentration of stock ownership may also adversely affect the trading price of our Class A common stock to the extent investors perceive a disadvantage in owning stock of a company with significant stockholders.
Our amended and restated certificate of incorporation and amended and restated bylaws, as well as Delaware law, contain provisions that could discourage acquisition bids or merger proposals, which may adversely affect the market price of our Class A common stock.
Our amended and restated certificate of incorporation authorizes our board of directors to issue preferred stock without shareholder approval. If our board of directors elects to issue preferred stock, it could be more difficult for a third party to acquire us. In addition, some provisions of our amended and restated certificate of incorporation and amended and restated bylaws could make it more difficult for a third party to acquire control of us, even if the change of control would be beneficial to our shareholders, including:
•limitations on the removal of directors, including a classified board whereby only one-third of the directors are elected each year, which will be phased out by 2027;
•limitations on the ability of our shareholders to call special meetings;
•providing that the board of directors is expressly authorized to adopt, or to alter or repeal our bylaws; and
•establishing advance notice and certain information requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by shareholders at shareholder meetings.
16
Table of Contents
In addition, certain change of control events have the effect of accelerating the payment due under the TRA, which could be substantial and accordingly serve as a disincentive to a potential acquirer of our company.
Future sales of our Class A common stock in the public market, or the perception that such sales may occur, could reduce our stock price, and any additional capital raised by us through the sale of equity or convertible securities may dilute your ownership in us.
Subject to certain limitations and exceptions, the CC Unit Holders may cause Cactus Companies to redeem their CC Units for shares of Class A common stock (on a one‑for‑one basis, subject to conversion rate adjustments for stock splits, stock dividends and reclassification and other similar transactions) and then sell those shares of Class A common stock. Additionally, we may issue additional shares of Class A common stock or convertible securities in subsequent public offerings. We had 68,899,841 outstanding shares of Class A common stock and 10,958,435 outstanding shares of Class B common stock as of February 25, 2026. The CC Unit Holders own all outstanding shares of our Class B common stock, representing approximately 13.7% of our total outstanding common stock.
As required pursuant to the terms of the registration rights agreement that we entered into at the time of our IPO, we have filed a registration statement on Form S-3 under the Securities Act of 1933, as amended, to permit the public resale of shares of Class A common stock owned by Cactus WH Enterprises, Lee Boquet and certain members of our board of directors.
We cannot predict the size of future issuances of our Class A common stock or securities convertible into Class A common stock or the effect, if any, that future issuances and sales of shares of our Class A common stock will have on the market price of our Class A common stock.
Sales of substantial amounts of our Class A common stock (including shares issued in connection with an acquisition) or secondary offerings, or the perception that such sales could occur, may adversely affect prevailing market prices of our Class A common stock.
Cactus Inc. will be required to make payments under the TRA for certain tax benefits that we may claim, and the amounts of such payments could be significant.
In connection with our IPO, we entered into the TRA with certain direct and indirect owners of Cactus LLC (the “TRA Holders”). Following completion of the CC Reorganization, the TRA Holders are certain direct and indirect owners of Cactus Companies and prior direct and indirect owners of Cactus LLC. This agreement generally provides for the payment by Cactus Inc. to each TRA Holder of 85% of the net cash savings, if any, in U.S. federal, state and local income tax and franchise tax that Cactus Inc. actually realizes or is deemed to realize in certain circumstances as a result of certain increases in tax basis and certain benefits attributable to imputed interest. Cactus Inc. will retain the benefit of the remaining 15% of these net cash savings.
The term of the TRA will continue until all tax benefits that are subject to the TRA have been utilized or expired, unless we exercise our right to terminate the TRA (or the TRA is terminated due to other circumstances, including our breach of a material obligation thereunder or certain mergers or other changes of control relating to Cactus Companies), and we make the termination payment specified in the TRA. In addition, payments we make under the TRA will be increased by any interest accrued from the due date (without extensions) of the corresponding tax return. Payments under the TRA commenced in 2019, and in the event that the TRA is not terminated, the payments under the TRA are anticipated to continue for approximately 20 years after the date of the last redemption of CC Units.
The payment obligations under the TRA are our obligations and not obligations of Cactus Companies, and we expect that the payments we will be required to make under the TRA will be substantial. Estimating the amount and timing of payments that may become due under the TRA is by its nature imprecise. For purposes of the TRA, cash savings in tax generally are calculated by comparing our actual tax liability (determined by using the actual applicable U.S. federal income tax rate and an assumed combined state and local income tax rate) to the amount we would have been required to pay had we not been able to utilize any of the tax benefits subject to the TRA. The amounts payable, as well as the timing of any payments under the TRA, are dependent upon significant future events and assumptions, including the timing of the redemption of CC Units, the price of our Class A common stock at the time of each redemption, the extent to which such redemptions are taxable transactions, the amount of the redeeming unit holder’s tax basis in its CC Units at the time of the relevant redemption, the depreciation and amortization periods that apply to the increase in tax basis, the amount and timing of taxable income we generate in the future and the U.S. federal income tax rates then applicable, and the portion of our payments under the TRA that constitute imputed interest or give rise to depreciable or amortizable tax basis. The payments under the TRA are not conditioned upon a holder of rights under the TRA having a continued ownership interest in us.
17
Table of Contents
In certain cases, payments under the TRA may be accelerated and/or significantly exceed the actual benefits, if any, we realize in respect of the tax attributes subject to the TRA.
If we elect to terminate the TRA early or it is terminated early due to Cactus Inc.’s failure to honor a material obligation thereunder or due to certain mergers or other changes of control, our obligations under the TRA would accelerate and we would be required to make an immediate payment equal to the present value of the anticipated future payments to be made by us under the TRA (determined by applying a discount rate equivalent to the 30-day SOFR plus 221.5 basis points) and such payment is expected to be substantial. The calculation of anticipated future payments will be based upon certain assumptions and deemed events set forth in the TRA, including (i) the assumption that we have sufficient taxable income to fully utilize the tax benefits covered by the TRA and (ii) the assumption that any CC Units (other than those held by Cactus Inc.) outstanding on the termination date are deemed to be redeemed on the termination date. Any early termination payment may be made significantly in advance of the actual realization, if any, of the future tax benefits to which the termination payment relates.
As a result of either an early termination or a change of control, we could be required to make payments under the TRA that exceed our actual cash tax savings under the TRA. In these situations, our obligations under the TRA could have a substantial negative impact on our liquidity and could have the effect of delaying, deferring or preventing certain mergers, asset sales, or other forms of business combinations or changes of control. If the TRA were terminated as of December 31, 2025, the estimated termination payments, based on the assumptions discussed above, would have been approximately $251.2 million (calculated using a discount rate equal to the 12-month term SOFR published by CME Group Benchmark Administration Limited, plus 221.5 basis points, applied against an undiscounted liability of approximately $348.4 million). The foregoing number is merely an estimate and the actual payment could differ materially. There can be no assurance that we will be able to finance our obligations under the TRA.
Payments under the TRA are based on the tax reporting positions that we will determine. The TRA Holders will not reimburse us for any payments previously made under the TRA if any tax benefits that have given rise to payments under the TRA are subsequently disallowed, except that excess payments made to any TRA Holder will be netted against payments that would otherwise be made to such TRA Holder, if any, after our determination of such excess. As a result, in some circumstances, we could make payments that are greater than our actual cash tax savings, if any, and may not be able to recoup those payments, which could adversely affect our liquidity.
If Cactus Companies were to become a publicly traded partnership taxable as a corporation for U.S. federal income tax purposes, we and Cactus Companies might be subject to potentially significant tax inefficiencies, and we would not be able to recover payments previously made by us under the TRA even if the corresponding tax benefits were subsequently determined to have been unavailable due to such status.
We intend to operate such that Cactus Companies does not become a publicly traded partnership taxable as a corporation for U.S. federal income tax purposes. A “publicly traded partnership” is a partnership the interests of which are traded on an established securities market or are readily tradable on a secondary market or the substantial equivalent thereof. Under certain circumstances, redemptions of CC Units pursuant to the Redemption Right or our Call Right (each as defined in Note 12 in the notes to the Consolidated Financial Statements) or other transfers of CC Units could cause Cactus Companies to be treated as a publicly traded partnership. Applicable U.S. Treasury regulations provide for certain safe harbors from treatment as a publicly traded partnership, and we intend to operate such that one or more such safe harbors shall apply. For example, we intend to limit the number of unit holders of Cactus Companies, and the Cactus Companies LLC Agreement, which was entered into with Cactus LLC in connection with the closing of our IPO and amended as part of the CC Reorganization, provides for limitations on the ability of CC Unit Holders to transfer their CC Units and provides us, as managing member of Cactus Companies, with the right to impose restrictions (in addition to those already in place) on the ability of unit holders of Cactus Companies to redeem their CC Units pursuant to the Redemption Right to the extent we believe it is necessary to ensure that Cactus Companies will continue to be treated as a partnership for U.S. federal income tax purposes.
If Cactus Companies were to become a publicly traded partnership, significant tax inefficiencies might result for us and for Cactus Companies, including inefficiencies as a result of our inability to file a consolidated U.S. federal income tax return with Cactus Companies. In addition, we would no longer have the benefit of certain increases in tax basis covered under the TRA, and we would not be able to recover any payments previously made by us under the TRA, even if the corresponding tax benefits (including any claimed increase in the tax basis of Cactus Companies’ assets) were subsequently determined to have been unavailable.
18
Table of Contents
General Risks
A failure of our information technology infrastructure and cyberattacks could adversely impact us.
We depend on our information technology (“IT”) systems for the efficient operation of our business. Accordingly, we rely upon the capacity, reliability and security of our IT hardware and software infrastructure and our ability to expand and update this infrastructure in response to our changing needs. Despite our implementation of security measures, our systems may be vulnerable to damage from computer viruses, natural disasters, incursions by intruders or hackers, failures in hardware or software, power fluctuations, cyber terrorists and other similar disruptions. Additionally, we rely on third parties to support the operation of our IT hardware and software infrastructure, and in certain instances, utilize web‑based applications. The failure of our IT systems or those of our vendors to perform as anticipated for any reason or any significant breach of security could disrupt our business and result in numerous adverse consequences, including reduced effectiveness and efficiency of operations, inappropriate disclosure of confidential and proprietary information, reputational harm, increased overhead costs and loss of important information, which could have a material adverse effect on our business and results of operations and cash flows. In addition, we may be required to incur significant costs to protect against damage caused by these disruptions or security breaches in the future.
We rely on our information systems to conduct our business, and failure to protect these systems against security breaches could disrupt our business and adversely affect our results of operations.
We rely on IT systems and networks in our operations, and those of our third-party vendors, suppliers and other business partners. Despite our implementation of security measures, our systems may be vulnerable to damage from computer viruses, natural disasters, incursions by intruders or hackers, failures in hardware or software, power fluctuations, cyber terrorists and other similar disruptions. A successful cyber-attack could materially disrupt our operations or lead to unauthorized access, release or alteration of information on our systems or the systems of our service providers, vendors or customers.
Any such attack or other breach of our IT systems—or those of our third-party service providers, suppliers or other business partners—could have a material adverse effect on our business, operating results, financial condition, our reputation or cash flows. In addition, the unavailability of the information systems or the failure of these systems to perform as anticipated, including any failure in disaster recovery plans or data backups, for us or our third-party technical managers for any reason could disrupt our business. We may be required to incur significant additional costs to remediate, modify or enhance our information technology systems or to try to prevent any such attacks.
Finally, certain cyber incidents, such as surveillance or reconnaissance, may remain undetected for an extended period. Our systems for protecting against cybersecurity risks may not be sufficient. As cyberattacks continue to evolve, including those leveraging artificial intelligence, we may be required to expend significant additional resources to continue to modify or enhance our protective measures or to investigate and remediate any vulnerabilities to cyberattacks. In addition, new laws and regulations governing data privacy, cybersecurity, and the unauthorized disclosure of confidential information pose increasingly complex compliance challenges and potentially elevate costs, and any failure to comply with these laws and regulations could result in significant penalties and legal liability.
Our business is subject to complex and evolving laws and regulations regarding privacy and data protection (“data protection laws”).
The regulatory environment relating to data privacy and protection is constantly evolving and can be subject to significant change. Laws and regulations governing data privacy and the unauthorized collection, processing or disclosure of personal information, including a growing number of U.S. state laws and regulations, such as the California Consumer Privacy Act, pose increasingly complex compliance challenges and potentially elevate our costs. Any failure, or perceived failure, by us to comply with applicable data protection laws could result in proceedings or actions against us by governmental entities or others, subject us to significant fines, penalties, judgments and negative publicity, require us to change our business practices, increase the costs and complexity of compliance, and adversely affect our business. As noted above, we are also subject to the possibility of cyber-attacks, which themselves may result in a violation of these laws. Finally, if we acquire a company that has violated or is not in compliance with applicable data protection laws, we may incur significant liabilities and penalties as a result.
19
Table of Contents
Holders of our Class A common stock may not receive dividends on their Class A common stock.
Holders of our Class A common stock are entitled to receive only such dividends as our Board of Directors may declare out of funds legally available for such payments. We are incorporated in Delaware and are governed by the Delaware General Corporation Law (“DGCL”). The DGCL allows a corporation to pay dividends only out of a surplus, as determined under Delaware law or, if there is no surplus, out of net profits for the fiscal year in which the dividend was declared and for the preceding fiscal year. Under the DGCL, however, we cannot pay dividends out of net profits if, after we pay the dividend, our capital would be less than the capital represented by the outstanding stock of all classes having a preference upon the distribution of assets. We are not required to pay a dividend, and any determination to pay dividends and other distributions in cash, stock or property by us in the future (including determinations as to the amount of any such dividend or distribution) will be at the discretion of our Board of Directors and will be dependent on then-existing conditions, including business conditions, our financial condition, results of operations, liquidity, capital requirements, contractual restrictions, including restrictive covenants contained in debt agreements, and other factors.
If we are unable to fully protect our intellectual property rights or trade secrets or a third party attempts to enforce their intellectual property rights against us, we may suffer a loss in revenue or any competitive advantage or market share we hold, or we may incur costs in litigation defending intellectual property rights.
While we have several patents and others are pending, we do not have patents relating to all of our key processes and technology. If we are not able to maintain the confidentiality of our trade secrets, or if our competitors are able to replicate our technology or services, our competitive advantage could be diminished. We also cannot provide any assurance that any patents we may obtain in the future would provide us with any significant commercial benefit or would allow us to prevent our competitors from employing comparable technologies or processes. We may initiate litigation from time to time to protect and enforce our intellectual property rights. In any such litigation, a defendant may assert that our intellectual property rights are invalid or unenforceable. Third parties from time to time may also initiate litigation against us by asserting that our businesses infringe, impair, misappropriate, dilute or otherwise violate another party’s intellectual property rights. We may not prevail in any such litigation, and our intellectual property rights may be found invalid or unenforceable or our products and services may be found to infringe, impair, misappropriate, dilute or otherwise violate the intellectual property rights of others. The results or costs of any such litigation may have an adverse effect on our business, results of operations and financial condition. Any litigation concerning intellectual property could be protracted and costly, is inherently unpredictable and could have an adverse effect on our business, regardless of its outcome.
Risks Related to the Joint Venture and the Baker Hughes Transaction
We may not realize the anticipated benefits from the Baker Hughes Transaction, and the Baker Hughes Transaction could adversely impact our business and our operating results.
We may not be able to achieve the full potential strategic and financial benefits that we expect to achieve from the Baker Hughes Transaction, or such benefits may be delayed or not occur at all. We may not achieve the anticipated benefits from the Baker Hughes Transaction for a variety of reasons, including, among others, unanticipated costs, charges and expenses. For example, the capital needs of the Joint Venture may exceed our current expectations. In addition, we may not achieve the anticipated unrealized benefits of operational initiatives being, and expected to be, taken with respect to the Joint Venture. If we fail to achieve some or all of the benefits expected to result from the Baker Hughes Transaction, or if such benefits are delayed, our business could be harmed.
We may experience difficulties in integrating the operations of the Joint Venture into our business.
The success of the Baker Hughes Transaction depends in part on our ability to successfully integrate the operations of the Joint Venture into our business. The integration process could take longer than anticipated and could result in the loss of key employees from the Company and/or the Joint Venture, the disruption of the Company’s and/or the Joint Venture’s ongoing businesses, tax costs or inefficiencies, or inconsistencies in standards, controls, information technology systems, procedures or policies, any of which could adversely affect our ability to maintain relationships with customers, employees or other third parties, or our ability to achieve the anticipated benefits of the Baker Hughes Transaction, and could harm our financial performance. Prior to the Baker Hughes Transaction, we did not have any significant infrastructure in most of the countries where the Joint Venture is doing business. As a result, Baker Hughes Company is providing the Joint Venture with limited transition services. If Baker Hughes Company fails to continue providing these transition services, or if we are unable to successfully or timely integrate and support the operations of the Joint Venture, we may incur unanticipated liabilities and be
20
Table of Contents
unable to realize the revenue growth, synergies and other anticipated benefits resulting from the Baker Hughes Transaction, and our business, results of operations and financial condition could be materially and adversely affected.
We may be required to acquire Baker Hughes Company’s interests in the Joint Venture.
Generally beginning on January 1, 2028, the Baker Member has the right to sell to either the Joint Venture or the Cactus Member, and the Joint Venture or the Cactus Member, as applicable, shall be obligated to purchase all of the Membership Interests held by Baker Hughes Company (the “Put Right”). The purchase price (the “Exit Price”) will be based on an enterprise value of the Joint Venture using a multiple of six times its TTM Adjusted EBITDA (as defined and calculated in the Joint Venture LLC Agreement), subject to a maximum valuation of $660.0 million. If the Baker Member exercises the Put Right, we may not have sufficient liquidity to fund the Exit Price. We may be required to access external financing, and we may be unable to do so on favorable terms, or at all. Accordingly, our obligation to fund the Exit Price may adversely affect our liquidity and cause us to enter into financing arrangements with terms that are unfavorable to us.
The Joint Venture LLC Agreement restricts certain of our or the Joint Venture’s actions.
For so long as Baker Hughes Company owns interests in the Joint Venture, we must, subject to certain exceptions, cause the Joint Venture to operate its business in the ordinary course consistent with past practice and not take certain actions that could reasonably be expected to reduce the Exit Price. Certain significant actions of the Joint Venture require the approval of Baker Hughes Company. Such restrictions may limit the ability of the Joint Venture to take actions that we believe to be beneficial to our business, results of operations and financial condition, or those of the Joint Venture. It is possible that disputes arise between us and Baker Hughes Company concerning our operation of the Joint Venture and such disputes could adversely affect our business and financial performance.
Our agreement with Baker Hughes Company significantly restricts our ability to transfer our interests in the Joint Venture. These transfer restrictions may limit our ability to dispose of our Membership Interests in the Joint Venture in ways which may be beneficial to our business, results of operations and financial condition.
For so long as Baker Hughes Company owns interests in the Joint Venture, we are required to conduct the surface pressure control business in the countries where the Acquired Business operated prior to our acquisition only through the Joint Venture, subject to certain exceptions. These restrictions mean that certain new opportunities will be directed to the Joint Venture and not us, which may reduce the direct benefit that we receive from such new opportunities.
The Joint Venture may have liabilities that are not known to us and the indemnities negotiated in the Framework Agreement may not offer adequate protection.
As part of the Baker Hughes Transaction, the Joint Venture assumed certain liabilities of the Acquired Business. There may be liabilities that we failed or were unable to discover in the course of performing due diligence investigations into the Acquired Business. We may also have not correctly assessed the significance of certain liabilities of the Acquired Business identified in the course of our due diligence. Any such liabilities, individually or in the aggregate, could have a material adverse effect on our business, financial condition and results of operations. As we integrate the Joint Venture into our operations, we may learn additional information about the Joint Venture, such as unknown or contingent liabilities and issues relating to compliance with applicable laws, that could potentially have an adverse effect on our business, financial condition and results of operations.
We may not be able to enforce claims with respect to certain of the representations and warranties that Baker Hughes Holdings made in the Framework Agreement.
Under the Framework Agreement entered into by Cactus Companies, Baker Hughes Holdings and the Joint Venture on June 2, 2025 (the "Framework Agreement"), Baker Hughes Holdings gave customary representations and warranties related to the Acquired Business. We may not be able to enforce any claims against Baker Hughes Holdings or its affiliates relating to breaches of certain representations and warranties in the Framework Agreement, except in the case of fraud as provided in the Framework Agreement. Accordingly, the liability of these entities with respect to breaches of Baker Hughes Holdings’ representations and warranties under the Framework Agreement is limited. To provide for coverage against certain breaches by Baker Hughes Holdings of its representations and warranties in the Framework Agreement and certain pre-closing taxes of the Joint Venture, we have obtained a representation and warranty insurance policy. The policy is subject to a retention amount, exclusions, policy limits and certain other customary terms and conditions.
21
Table of Contents
The Baker Hughes Transaction represents an expansion outside of our current geographic regions, and we may encounter new obstacles operating in different geographic regions.
Prior to the Baker Hughes Transaction, our operations historically focused on the United States. The Baker Hughes Transaction represents an expansion of our operations in the Middle East and other jurisdictions. Certain aspects related to operating in these new jurisdictions may not be as familiar to us as the jurisdictions in which we operated prior to the Baker Hughes Transaction. As a result, we may encounter obstacles that may cause us not to achieve the expected results of the Baker Hughes Transaction. These obstacles may include a less familiar and more volatile geopolitical landscape, new customers with whom we have no established relationship and just a small number of which account for the preponderance of the Joint Venture’s revenue, pressure from local governments to hire local associates, use local suppliers or to direct business to nationalized companies, unfamiliar operating conditions, and a distinct regulatory environment. Our future success will depend, in part, upon our ability to manage this expanded business, which may pose substantial challenges for management, including challenges related to the management and monitoring of new operations and jurisdictions and associated increased costs and complexity. We may also face increased scrutiny from governmental authorities as a result of the increase in the size of our business. Any adverse conditions, regulations or developments related to our expansion into or within these new jurisdictions may have a negative impact on our business, financial condition and results of operations.
Item 1B. Unresolved Staff Comments
None.
Item 1C. Cybersecurity
Risk Management and Strategy.
We depend on information systems and related technologies for internal purposes, including secure data storage, processing, and transmission, as well as in our interactions with our business associates, customers, and suppliers. We also rely on third-party business associates, with whom we may share data and services, to defend their digital technologies and services against attack.
Managing Material Risks & Integrated Overall Risk Management
We collaborate with our clients, vendors and other third parties to develop information systems and protect against cybersecurity threats. We engage third-party security experts for risk assessments and program enhancements.
There are risks associated with the use of vendors, service providers and other third parties that provide information system services to us, process information on our behalf, or have access to our information. We evaluate third-party service providers’ cybersecurity posture and seek to mitigate risk through contractual safeguards, monitoring, and incident response plans.
Risks from Cybersecurity Incidents
22
Table of Contents
such incidents or attacks do occur. However, the Company does not currently anticipate that risks from cybersecurity threats are reasonably likely to materially affect the Company, including its business strategy, results of operations, or financial condition.
Governance.
Risk Management Personnel
Monitoring Cybersecurity Risks and Incidents
Our IT Director of Cybersecurity and Networking meets regularly with members of our executive team to discuss and review risks related to cybersecurity. The reviews may include evaluations of risks and incidents identified by third-party providers retained to review our cyber risk as well as cybersecurity threat scenario planning. Identified risks related to cybersecurity threats may also be analyzed as part of our ERM process.
Board of Director Oversight
Our Audit Committee is responsible for oversight of our programs and procedures related to cybersecurity risk. Management provides periodic reports to the Audit Committee on cybersecurity risk. The Audit Committee reports significant findings from these reports to the full Board of Directors.
23
Table of Contents
Item 2. Properties
The following table sets forth information with respect to our current principal facilities as of December 31, 2025. We believe that our facilities are suitable and adequate for our current operations.
| Location | Type | Operating Segment | Own/ Lease | |||||||||||||||||
| United States | ||||||||||||||||||||
| Baytown, TX | Manufacturing Facility, Service Center and Land | Spoolable Technologies | Own | |||||||||||||||||
Bossier City, LA(1) | Manufacturing Facility and Service Center | Pressure Control | Lease | |||||||||||||||||
Bossier City, LA(1) | Manufacturing and Assembly Facilities, Warehouse and Land | Pressure Control | Own | |||||||||||||||||
| Donora, PA | Service Center | Pressure Control | Lease | |||||||||||||||||
DuBois, PA(2) | Service Center | Pressure Control | Lease | |||||||||||||||||
| Hobbs, NM | Service Center / Land | Pressure Control | Own | |||||||||||||||||
| Hobbs, NM | Service Center | Spoolable Technologies | Lease | |||||||||||||||||
| Houston, TX | Administrative Headquarters | N/A(3) | Lease | |||||||||||||||||
| New Waverly, TX | Service Center / Land | Pressure Control | Own | |||||||||||||||||
| Odessa, TX | Service Center / Land | Pressure Control | Own | |||||||||||||||||
| Oklahoma City, OK | Service Center | Pressure Control | Lease | |||||||||||||||||
| Pleasanton, TX | Service Center | Spoolable Technologies | Own | |||||||||||||||||
Pleasanton, TX(2) | Service Center | Pressure Control | Lease | |||||||||||||||||
Williston, ND(2) | Service Center | Pressure Control | Lease | |||||||||||||||||
International | ||||||||||||||||||||
| Queensland, Australia | Service Centers and Offices / Land | Pressure Control | Lease | |||||||||||||||||
| Suzhou, China | Production Facility and Offices | Pressure Control | Lease | |||||||||||||||||
Hai Duong, Vietnam | Production Facility and Offices | Pressure Control | Lease | |||||||||||||||||
(1) Consists of various facilities adjacent to each other constituting our manufacturing facility, test and assembly facility, warehouse and service center.
(2) We also own land adjacent to these facilities.
(3) Corporate headquarters.
Item 3. Legal Proceedings
Due to the nature of our business, we are, from time to time, involved in routine litigation or subject to disputes or claims related to our business activities, including workers’ compensation claims and employment related disputes. For information concerning existing legal proceedings as of December 31, 2025, see Note 13 to our consolidated financial statements.
Item 4. Mine Safety Disclosures
Not applicable.
24
Table of Contents
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Common Stock
We have issued and outstanding two classes of common stock, Class A common stock and Class B common stock. Holders of Class B common stock own a corresponding number of CC Units which may be redeemed for shares of Class A common stock. The principal market for our Class A common stock is the New York Stock Exchange, where it is traded under the symbol “WHD.” No public trading market currently exists for our Class B common stock. As of December 31, 2025, there was one holder of record of our Class A common stock. The foregoing does not include the number of shareholders whose shares are nominally held by banks, brokerage houses or other institutions, but includes all such institutions as one record holder. As of December 31, 2025, there were five holders of record of our Class B common stock.
Dividends
We have paid a regular quarterly cash dividend on our Class A common stock as approved by our Board of Directors since December 2019. Dividends are not paid to our Class B common stockholders; however, a corresponding distribution up to the same amount per share as our Class A common stockholders is paid to our CC Unit Holders for any dividends declared on our Class A common stock. We have paid quarterly dividends uninterrupted since initiation of the cash dividend program and the approved dividend per share amount has increased from the initial amount of $0.09 per share to the current amount of $0.14 per share of Class A common stock. In fiscal year 2025, the annual dividend rate for our Class A common stock was $0.54 per share compared to $0.50 per share in fiscal year 2024 and $0.46 per share in fiscal year 2023.
We currently intend to continue paying the quarterly dividend at the current levels while retaining the balance of future earnings, if any, to finance the growth of our business or repurchase shares of our Class A common stock. We may seek to increase the dividend in the future if our financial condition and results of operations permit. Our future dividend policy is within the discretion of our Board of Directors and will depend upon then-existing conditions, including our results of operations, financial condition, capital requirements, investment opportunities, statutory and contractual restrictions on our ability to pay dividends and other factors our Board of Directors may deem relevant.
Share Repurchase Program
In June 2023, our Board of Directors authorized the Company to repurchase shares of its Class A common stock for an aggregate purchase price of up to $150 million. Under our share repurchase program, shares may be repurchased from time to time in open market transactions or block trades, in privately negotiated transactions or any other method permitted under U.S. securities laws, rules and regulations. The repurchase program does not obligate the Company to purchase any particular amount of shares, and the repurchase program may be suspended or discontinued at any time at the Company’s discretion.
The Inflation Reduction Act of 2022 provides for, among other things, the imposition of a 1% U.S. Federal excise tax on certain repurchases of stock by publicly traded U.S. corporations after December 31, 2022. Accordingly, this excise tax applies to our share repurchase program. For the years ended December 31, 2025 and 2024, issuances of shares exceeded share repurchases and, as such, there was no excise tax. In future years, the Company could be subject to the excise tax depending on the total shares repurchased in comparison to shares issued.
25
Table of Contents
Performance Graph
The graph below compares the cumulative total shareholder return on our Class A common stock to the S&P 500 Index, the S&P Oil & Gas Equipment & Services Select Industry Index and the PHLX Oil Service Index. The total shareholder return assumes $100 was invested on December 31, 2020 in Cactus Inc., the S&P 500 Index, the S&P Oil & Gas Equipment & Services Select Industry Index and the PHLX Oil Service Index. It also assumes reinvestment of all dividends. The following graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that Cactus Inc. specifically incorporates it by reference into such filing.
26
Table of Contents
Issuer Purchases of Equity Securities
The following sets forth information with respect to our repurchase of Class A common stock during the three months ended December 31, 2025 (in whole shares).
| Period | Total number of shares purchased(1) | Weighted-average price paid per share (2) | Total number of shares purchased as part of publicly announced plans or programs (3) | Maximum dollar value of shares that may yet be purchased under the plans or programs (3) | ||||||||||||||||||||||
October 1-31, 2025 | — | $ | — | — | $ | 146,302,153 | ||||||||||||||||||||
November 1-30, 2025 | — | $ | — | — | $ | 146,302,153 | ||||||||||||||||||||
December 1-31, 2025 | 289 | $ | 43.36 | — | $ | 146,302,153 | ||||||||||||||||||||
| Total | 289 | $ | 43.36 | — | $ | — | ||||||||||||||||||||
(1)Consists of shares of Class A common stock repurchased from employees to satisfy tax withholding obligations related to restricted stock units that vested during the period.
(2)Average price paid for Class A common stock purchased from employees to satisfy tax withholding obligations related to restricted stock units that vested during the period.
(3)In June 2023, our board of directors authorized the Company to repurchase shares of its Class A common stock for an aggregate purchase price of up to $150 million.
Item 6. (Reserved)
27
Table of Contents
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the accompanying consolidated financial statements and related notes. The following discussion contains “forward-looking statements” that reflect our plans, estimates, beliefs and expected performance. Our actual results may differ materially from those anticipated as discussed in these forward-looking statements as a result of a variety of risks and uncertainties, including those described in “Cautionary Statement Regarding Forward-Looking Statements” and “Item 1A. Risk Factors” included elsewhere in this Annual Report, all of which are difficult to predict. In light of these risks, uncertainties and assumptions, the forward-looking events discussed may not occur. We assume no obligation to update any of these forward-looking statements except as otherwise required by law.
Market Factors
See “Item 1. Business” for information on our products and business. Demand for our products and services depends primarily upon oil and gas industry activity levels, including the number of active drilling rigs, the number of wells being drilled, the number of wells being completed and the volume of newly producing wells, among other factors. Oil and gas E&P activity is in turn heavily influenced by, among other factors, investor sentiment, availability of capital and oil and gas prices locally and worldwide, which have historically been volatile.
Revenues generated by our Pressure Control and Spoolable Technologies operating segments are derived from three sources: products, rentals, and field service and other. Product revenues are derived from the sale of wellhead systems, production trees and spoolable pipe and fittings. Rental revenues are primarily derived from the rental of equipment used during the completion process, the repair of such equipment and the rental of equipment or tools used to install wellhead equipment or spoolable pipe. Field service and other revenues are primarily earned when we provide installation and other field services for both product sales and equipment rental.
Pressure Control
The Pressure Control segment designs, manufactures, sells and rents a range of wellhead and pressure control equipment under the Cactus Wellhead brand. Products are sold and rented principally for onshore unconventional oil and gas wells and are utilized during the drilling, completion and production phases of our customers’ wells. In addition, we provide field services for all of our products and rental items to assist with the installation, maintenance and handling of the equipment.
We operate through service centers in the United States, which are strategically located in the key oil and gas producing regions, and in Eastern Australia. These service centers support our field services and provide equipment assembly and repair services. We also provide rental and service operations in the Middle East. Pressure Control manufacturing and production facilities are located in Bossier City, Louisiana, Suzhou, China and Hai Duong, Vietnam.
Demand for our product sales in the Pressure Control segment are driven primarily by the number of new wells drilled, as each new well requires a wellhead and, after the completion phase, a production tree. Demand for our rental items is driven primarily by the number of well completions as we rent frac trees to oil and gas operators to assist in hydraulic fracturing. Rental demand is also driven by drilling activity as we rent tools used in the installation of wellheads. Field service and other revenues are closely correlated with revenues from product sales and rentals, as items sold or rented almost always have an associated service component.
Spoolable Technologies
The Spoolable Technologies segment designs, manufactures and sells spoolable pipe and associated end fittings under the FlexSteel brand. Our customers use these products primarily as production, gathering and takeaway pipelines to transport oil, gas or other liquids. In addition, we also provide field services and rental items to assist our customers with the installation of these products. We support our field service operations through service centers and pipe yards located in oil and gas producing regions throughout the United States and Western Canada. Our manufacturing facility is located in Baytown, Texas.
Demand for our product sales in the Spoolable Technologies segment are driven primarily by the number of wells being placed into production after the completions phase as customers use our spoolable pipe and associated fittings to bring wells more rapidly onto production. Rental and field service and other revenues are closely correlated with revenues from product sales, as items sold usually have an associated rental and service component.
28
Table of Contents
Seasonality
Our business experiences some seasonality during the fourth quarter due to holidays and customers managing their cash balances as the year closes out. These activities can lead to lower demand in our three revenue categories as well as lower margins, particularly in field services due to lower labor utilization.
Recent Developments and Trends
Oil and Natural Gas Prices
The following table summarizes average oil and natural gas prices in North America over the indicated periods as well as industry activity levels as reflected by the average number of active onshore drilling rigs during the same periods.
| Year Ended | ||||||||||||||||||||
| December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
WTI Oil Price ($/bbl) (1) | $ | 65.39 | $ | 76.63 | $ | 77.58 | ||||||||||||||
Natural Gas Price ($/MMBtu) (2) | $ | 3.52 | $ | 2.19 | $ | 2.53 | ||||||||||||||
U.S. Land Drilling Rigs (3) | 545 | 580 | 667 | |||||||||||||||||
(1) U.S. Energy Information Administration (“EIA”) Cushing, OK WTI (“West Texas Intermediate”) spot price per barrel of crude oil.
(2) EIA Henry Hub Natural Gas spot price per million British Thermal Unit (“MMBtu”).
(3) Based on Baker Hughes rig count information.
Broad economic uncertainty, geopolitical uncertainty, and robust supply of crude oil relative to demand resulted in lower oil prices and U.S. drilling activity levels in 2025. Onshore U.S. drilling activity levels declined through the first half of 2025, resulting in the average number of U.S. land drilling rigs for 2025 to be 6% below 2024 levels. Average oil prices were down 15% from 2024 average levels. Conversely, optimism regarding the medium-to-long term outlook for natural gas demand strengthened as energy demands from artificial intelligence-associated infrastructure build out increased. Henry Hub natural gas prices increased approximately 61% in 2025 from 2024 with prices averaging $3.52 per MMBtu in 2025 compared to $2.19 per MMBtu in 2024. Natural gas-directed drilling activity favorably impacted industry activity levels, but not enough to offset weakness in oil-directed drilling activity. Ongoing conflicts in Ukraine and the Middle East have had global repercussions on commodity prices and have resulted in increased market uncertainty and volatile equity and commodity pricing.
U.S. Trade Policies
Over the course of 2025, the Trump administration has implemented and announced a number of new tariffs, including new Section 232 tariffs of 50% on imports of steel and certain products made from steel from most countries outside of the U.S., and Synthetic Opioid tariffs on all imports from China. Threats and actual implementation of tariffs continue to cause much market and geopolitical uncertainty, as evidenced by the recently announced and then rescinded imposition of tariffs by the U.S. on imports from NATO allies opposed to U.S. intervention in Greenland. Tariff announcements have resulted in global equity, bond, and currency markets to experience heightened levels of volatility as market participants incorporate potential effects of supply chain disruption, inflation, and consumer demand into pricing models.
We are incurring, and expect to continue to incur, elevated tariff expenses on our goods imported from Vietnam and China, and experience generally higher steel input costs at our Bossier City manufacturing facility as a result of the broad Section 232 tariffs. Both tariffs and higher steel input costs have impacted profitability, although the impact has been partially mitigated by cost reduction efforts and increased pricing. The weaker oil demand and increased supply outlook and associated decline in commodity pricing has led and is likely to continue to lead to lower U.S. land drilling and completion activity levels in 2026 and correspondingly may reduce domestic demand for our products and services.
29
Table of Contents
Pillar Two Framework
The Organization for Economic Cooperation and Development (“OECD”) has introduced a framework (“Pillar Two”) that provides for a new, global minimum tax of at least 15% on the income of large multinational corporations arising in each jurisdiction in which they operate. Pillar Two is being implemented on a country-by-country basis, and many countries have adopted rules in this regard. The United States has raised concerns regarding Pillar Two and has set out a proposed “side-by-side” solution under which U.S. parented groups (such as the Company) would be exempted from certain minimum taxes under Pillar Two in recognition of the existing U.S. minimum tax rules to which they are subject. On June 28, 2025, the Group of Seven issued a statement indicating that they agree that a side-by-side solution could preserve gains made by jurisdictions in tackling base erosion and profit shifting and provide clarity and stability in the international tax landscape. However, none of the OECD member states that have adopted Pillar Two have enacted rules necessary to implement the side-by-side solution. The Company continues to evaluate the impact of both Pillar Two and the proposed side-by-side solution and estimates the impacts to income tax expense to be immaterial.
2025 Tax Legislation
On July 4, 2025, tax legislation colloquially known as the One Big Beautiful Bill Act (“OBBBA”) was enacted. The OBBBA includes tax provisions such as the reinstatement of immediate deductibility of certain capital expenditures for tangible, depreciable personal property of domestic research and development expenditures. These provisions have the effect of accelerating tax deductions which, in turn, will reduce current tax expense with an offset to deferred tax expense. The Company continues to evaluate the impacts of this legislation but anticipates the impact to total income tax expense will be immaterial.
Consolidated Results of Operations
The following discussions relating to significant line items from our condensed consolidated statements of income are based on available information and represent our analysis of significant changes or events that impact the comparability of reported amounts. Where appropriate, we have identified specific events and changes that affect comparability or trends and, where reasonably practicable, have quantified the impact of such items.
We have two operating segments consisting of the Pressure Control segment and the Spoolable Technologies segment. Our results of operations are evaluated by the Chief Executive Officer on a consolidated basis as well as at the segment level. The performance of our operating segments is primarily evaluated based on segment operating income (in addition to other measures), which is defined as income before taxes and before interest income (expense), net, other income (expense), net and corporate and other expenses not allocated to the operating segments.
30
Table of Contents
Year Ended December 31, 2025 Compared to Year Ended December 31, 2024
The following table presents summary consolidated operating results for the periods indicated:
| Year Ended | |||||||||||||||||||||||
| December 31, | |||||||||||||||||||||||
| 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Revenues | |||||||||||||||||||||||
| Pressure Control | $ | 717,191 | $ | 724,038 | $ | (6,847) | (0.9)% | ||||||||||||||||
| Spoolable Technologies | 368,245 | 407,038 | (38,793) | (9.5) | |||||||||||||||||||
Corporate and other | (6,385) | (1,262) | (5,123) | nm | |||||||||||||||||||
| Total revenues | 1,079,051 | 1,129,814 | (50,763) | (4.5) | |||||||||||||||||||
| Operating income | |||||||||||||||||||||||
| Pressure Control | 189,861 | 210,710 | (20,849) | (9.9) | |||||||||||||||||||
| Spoolable Technologies | 98,660 | 104,864 | (6,204) | (5.9) | |||||||||||||||||||
| Total segment operating income | 288,521 | 315,574 | (27,053) | (8.6) | |||||||||||||||||||
| Corporate and other expenses | (38,020) | (25,961) | (12,059) | 46.5 | |||||||||||||||||||
| Total operating income | 250,501 | 289,613 | (39,112) | (13.5) | |||||||||||||||||||
Interest income, net | 10,962 | 6,459 | 4,503 | 69.7 | |||||||||||||||||||
Other (expense) income, net | (794) | 3,204 | (3,998) | nm | |||||||||||||||||||
| Income before income taxes | 260,669 | 299,276 | (38,607) | (12.9) | |||||||||||||||||||
| Income tax expense | 59,027 | 66,518 | (7,491) | (11.3) | |||||||||||||||||||
| Net income | $ | 201,642 | $ | 232,758 | $ | (31,116) | (13.4) | ||||||||||||||||
| Less: net income attributable to non-controlling interest | 35,628 | 47,351 | (11,723) | (24.8) | |||||||||||||||||||
| Net income attributable to Cactus Inc. | $ | 166,014 | $ | 185,407 | $ | (19,393) | (10.5)% | ||||||||||||||||
nm = not meaningful
Pressure Control. Pressure Control revenue was $717.2 million for 2025, a decrease of $6.8 million, or 0.9%, from $724.0 million for 2024. The decrease in revenues was primarily due to reduced sales of wellhead and production related equipment resulting from lower drilling and completion activity by our customers following a decline in rig counts, offset by an increase in intersegment sales. Operating income of $189.9 million in 2025 resulted in a decrease of $20.8 million, or 9.9%, from $210.7 million in 2024. The decrease in operating income was primarily attributable to escalated tariff cost impacts on product margins, as well as increased legal expenses and reserves in connection with litigation claims.
Spoolable Technologies. Spoolable Technologies revenue of $368.2 million for 2025, represented a decrease of $38.8 million, or 9.5%, from $407.0 million for 2024, primarily due to reduced sales of spoolable pipe and associated end fittings resulting from lower domestic activity by our customers. Total operating income of $98.7 million for 2025, resulted in a decrease of $6.2 million, or 5.9%, from $104.9 million for 2024. Operating income for 2025 was reduced primarily due to lower sales volume. Operating income for 2024 included a non-recurring $16.3 million of expense related to the change in fair value of the earn‑out liability associated with the FlexSteel acquisition.
Corporate and other. Corporate and other revenue includes the elimination of inter-segment sales from our Pressure Control segment to our Spoolable Technologies segment. Corporate and other expenses include costs associated with executive management and other administrative functions not directly attributable to our reporting segments. Corporate and other expenses for 2025 were $38.0 million, an increase of $12.1 million from $26.0 million for 2024. The increase was largely attributable to professional fees associated with the Baker Hughes transaction.
31
Table of Contents
Interest income, net. Interest income, net was $11.0 million in 2025 compared to $6.5 million in 2024. The increase in interest income, net of $4.5 million was primarily due to an increase in interest income earned on higher levels of cash invested during the period.
Other (expense) income, net. Other expense, net of $0.8 million in 2025, represented a decrease of $4.0 million, compared to other income, net of $3.2 million. The decrease primarily related to the revaluation of the liability related to the tax receivable agreement as a result of changes to the forecasted state tax rate.
Income tax expense. Income tax expense for 2025 was $59.0 million (22.6% effective tax rate) compared to $66.5 million (22.2% effective tax rate) for 2024. Income tax expense for 2025 includes $57.3 million of expense associated with current income, approximately $0.3 million of expense associated with permanent differences related to equity compensation, and approximately $1.4 million of expense associated with other adjustments. Income tax expense for 2024 includes approximately $66.5 million of expense associated with current income. Additionally, in 2024 we recognized $2.1 million of expense associated with the revaluation of our deferred tax asset as a result of a change in our forecasted state tax rate, a $2.1 million benefit related to the finalization of our 2023 tax returns, a $0.7 million benefit associated with permanent differences related to equity compensation and $0.7 million of expense associated with other adjustments. Partial valuation releases occur in conjunction with redemptions of CC Units as a portion of Cactus Inc.’s deferred tax assets from its investment in Cactus Companies becomes realizable. Cactus Inc. is only subject to federal and state income tax on its share of income from Cactus Companies. Income allocated to the non-controlling interest is only taxable to the non-controlling interest.
Year Ended December 31, 2024 Compared to Year Ended December 31, 2023
The following table presents summary consolidated operating results for the periods indicated:
| Year Ended | |||||||||||||||||||||||
| December 31, | |||||||||||||||||||||||
| 2024 | 2023 | $ Change | % Change | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Revenues | |||||||||||||||||||||||
| Pressure Control | $ | 724,038 | $ | 756,727 | $ | (32,689) | (4.3)% | ||||||||||||||||
| Spoolable Technologies | 407,038 | 340,233 | 66,805 | 19.6 | |||||||||||||||||||
Corporate and other | (1,262) | — | (1,262) | — | |||||||||||||||||||
| Total revenues | 1,129,814 | 1,096,960 | 32,854 | 3.0 | |||||||||||||||||||
| Operating income | |||||||||||||||||||||||
| Pressure Control | 210,710 | 236,934 | (26,224) | (11.1) | |||||||||||||||||||
| Spoolable Technologies | 104,864 | 62,172 | 42,692 | 68.7 | |||||||||||||||||||
| Total segment operating income | 315,574 | 299,106 | 16,468 | 5.5 | |||||||||||||||||||
| Corporate and other expenses | (25,961) | (34,740) | 8,779 | (25.3) | |||||||||||||||||||
| Total operating income | 289,613 | 264,366 | 25,247 | 9.6 | |||||||||||||||||||
| Interest income (expense), net | 6,459 | (6,480) | 12,939 | nm | |||||||||||||||||||
Other income, net | 3,204 | 4,490 | (1,286) | (28.6) | |||||||||||||||||||
| Income before income taxes | 299,276 | 262,376 | 36,900 | 14.1 | |||||||||||||||||||
| Income tax expense | 66,518 | 47,536 | 18,982 | 39.9 | |||||||||||||||||||
| Net income | $ | 232,758 | $ | 214,840 | $ | 17,918 | 8.3 | ||||||||||||||||
| Less: net income attributable to non-controlling interest | 47,351 | 45,669 | 1,682 | 3.7 | |||||||||||||||||||
| Net income attributable to Cactus Inc. | $ | 185,407 | $ | 169,171 | $ | 16,236 | 9.6% | ||||||||||||||||
nm = not meaningful
Pressure Control. Pressure Control revenue was $724.0 million for 2024, a decrease of $32.7 million, or 4.3%, from $756.7 million for 2023. The decrease in revenues was primarily due to decreased sales of wellhead and production related equipment resulting from lower drilling and completion activity by our customers. In addition, rental of drilling and completion equipment decreased as a result of the decline in customer activity. Operating income of $210.7 million in 2024 resulted in a decrease of $26.2 million, or 11.1%, from $236.9 million in 2023. The decrease was primarily attributable to lower gross
32
Table of Contents
margins during the period due to decreased customer activity levels and higher selling, general and administrative ("SG&A") expenses. The increase in SG&A expenses primarily related to higher personnel costs, stock-based compensation expense and other reserves, partially offset by a decrease in bad debt expense.
Spoolable Technologies. Spoolable Technologies revenue of $407.0 million for 2024, represented an increase of $66.8 million, or 19.6%, from $340.2 million for 2023 as results for 2023 only included ten months of revenues from the FlexSteel acquisition, which closed on February 28, 2023. Total operating income of $104.9 million for 2024, resulted in an increase of $42.7 million, or 68.7%, from $62.2 million for 2023 as results for 2023 only included ten months of revenues. Operating income for the 2024 included $16.3 million of expense related to the change in fair value of the earn-out liability for the FlexSteel acquisition and $16.0 million of intangible amortization. Operating income for 2023 included approximately $14.9 million of expense related to the change in fair value of the estimated earn-out liability, $23.5 million of inventory step-up expense and $20.3 million of intangible amortization expense, as well as depreciation expense of $13.8 million primarily associated with the step-up of fixed assets in connection with accounting for the purchased assets at fair value.
Corporate and other. Corporate and other revenue represents the elimination of inter-segment sales from our Pressure Control segment to our Spoolable Technologies segment. Corporate and other expenses include costs associated with executive management and other administrative functions not directly attributable to our reporting segments. Corporate and other expenses for 2024 were $26.0 million, a decrease of $8.8 million from $34.7 million for 2023. The decrease was largely attributable to lower professional fees related to transaction costs associated with growth initiatives, including the closing of and accounting for the FlexSteel acquisition in 2023.
Interest income (expense), net. Interest income, net was $6.5 million in 2024 compared to interest expense, net of $6.5 million in 2023. The increase in interest income, net of $12.9 million was primarily due to an increase in interest income earned on cash invested during the 2024 period. Interest expense in 2023 was primarily related to borrowings outstanding through July 2023 under the Amended ABL Credit Facility (the "Second Amended ABL Credit Facility") which were required to finance the FlexSteel acquisition.
Other income, net. Other income, net represents non-cash adjustments for the revaluation of the liability related to the tax receivable agreement as a result of changes to the forecasted state tax rate.
Income tax expense. Income tax expense for 2024 was $66.5 million (22.2% effective tax rate) compared to $47.5 million (18.1% effective tax rate) for 2023. Income tax expense for 2024 includes approximately $66.5 million of expense associated with current income. Additionally, in 2024 we recognized $2.1 million of expense associated with the revaluation of our deferred tax asset as a result of a change in our forecasted state tax rate, a $2.1 million benefit related to the finalization of our 2023 tax returns, a $0.7 million benefit associated with permanent differences related to equity compensation and $0.7 million of expense associated with other adjustments. Income tax expense for 2023 includes approximately $56.6 million of expense associated with current income offset by a $12.1 million benefit associated with the release of our valuation allowance previously provided for our investment in Cactus Companies based on the determination that the deferred tax asset was realizable due to our ability to generate sufficient taxable income of the appropriate type. Additionally in 2023, we recognized $4.9 million of expense associated with the revaluation of our deferred tax asset as a result of a change in our forecasted state tax rate, $0.5 million of expense related to the finalization of our 2022 tax returns, a $1.2 million benefit associated with permanent differences related to equity compensation and a $1.2 million benefit associated with other adjustments. Partial valuation releases occur in conjunction with redemptions of CC Units as a portion of Cactus Inc.’s deferred tax assets from its investment in Cactus Companies becomes realizable. Cactus Inc. is only subject to federal and state income tax on its share of income from Cactus Companies. Income allocated to the non-controlling interest is only taxable to the non-controlling interest.
Liquidity and Capital Resources
At December 31, 2025, we had $494.6 million of cash, cash equivalents and restricted cash, of which $123.6 million was available cash on hand. Restricted cash consisted of $371.0 million of cash held in an escrow account in connection with the Baker Hughes Transaction. In connection with the Baker Hughes Transaction, these funds were required to be placed in escrow and were restricted from use for any purpose other than funding the Baker Hughes Transaction consideration at closing. The escrowed funds were released on January 1, 2026, the acquisition closing date, at which point the restriction lapsed and the cash was released to Baker Hughes Company.
Our primary sources of liquidity and capital resources are cash on hand, cash flows generated by operating activities and, if necessary, borrowings under our Amended ABL Credit Facility (as defined in Note 6 in the notes to the Consolidated Financial Statements). Depending upon market conditions and other factors, we may also have the ability to issue additional equity and debt if needed. As of December 31, 2025, we had no borrowings outstanding under our Amended ABL Credit
33
Table of Contents
Facility and $222.9 million of available borrowing capacity in addition to $100.0 million available under our Term Loan Facility (as defined in Note 6 to the notes to the Consolidated Financial Statements). We had $1.8 million in letters of credit outstanding at December 31, 2025 which reduced our available borrowing capacity. We were in compliance with the covenants of the Amended ABL Credit Facility as of December 31, 2025.
In June 2023, our board of directors authorized the Company to repurchase shares of its Class A common stock for an aggregate purchase price of up to $150 million. Under our share repurchase program, shares may be repurchased from time to time in open market transactions or block trades, in privately negotiated transactions or any other method permitted under U.S. securities laws, rules and regulations. The repurchase program does not obligate the Company to purchase any particular amount of shares, and the repurchase program may be suspended or discontinued at any time at the Company’s discretion. At December 31, 2025, $146.3 million of Class A common stock could be repurchased under our share repurchase program.
We expect that our existing cash on hand, cash generated from operations and available borrowings under our Amended ABL Credit Facility and Term Loan Facility will be sufficient for the next 12 months to meet our material cash requirements, including working capital requirements, debt service obligations, anticipated capital expenditures, lease obligations, repurchases of shares of our Class A common stock, expected TRA liability payments, anticipated tax liabilities and dividends to holders of our Class A common stock as well as pro rata cash distributions to holders of CC Units other than Cactus Inc.
We currently estimate our net capital expenditures for the year ending December 31, 2026 will range from $40 million to $50 million, including investments in international expansion such as investments in the Joint Venture, further diversification of our low cost supply chain, enhancements for our Baytown, TX manufacturing plant and Hobbs, NM service center and additional deployment of equipment to facilitate installation of recent product introductions. We continuously evaluate our capital expenditures, and the amount we ultimately spend will depend on a number of factors, including, among other things, demand for rental assets, available capacity in existing locations, prevailing economic conditions, market conditions in the E&P industry, customers’ forecasts, crude oil and natural gas price volatility and company initiatives.
For information concerning our future lease payments as of December 31, 2025, see Note 10 to our consolidated financial statements.
Our ability to satisfy our long-term liquidity requirements, including cash distributions to CC Unit Holders to fund their respective income tax liabilities relating to their share of the income of Cactus Companies and to fund liabilities related to the TRA, depends on our future operating performance, which is affected by, and subject to, prevailing economic conditions, market conditions in the E&P industry, availability and cost of raw materials, and financial, business and other factors, many of which are beyond our control. We will not be able to predict or control many of these factors, such as economic conditions in the markets where we operate and competitive pressures. If necessary, we could choose to further reduce our spending on capital projects and operating expenses to ensure we operate within the cash flow generated from our operations.
Tax Receivable Agreement (TRA)
The TRA generally provides for the payment by Cactus Inc. to the TRA Holders of 85% of the net cash savings, if any, in U.S. federal, state and local income tax and franchise tax that Cactus Inc. actually realizes or is deemed to realize in certain circumstances. Cactus Inc. retains the benefit of the remaining 15% of these net cash savings. To the extent Cactus Companies has available cash, we intend to cause Cactus Companies to make pro rata distributions to its unit holders, including Cactus Inc., in an amount at least sufficient to allow us to pay our taxes and to make payments under the TRA.
Except in cases where we elect to terminate the TRA early, the TRA is terminated early due to certain mergers, asset sales, or other forms of business combinations or changes of control relating to Cactus Companies or if we have available cash but fail to make payments when due under circumstances where we do not have the right to elect to defer the payment. We may generally elect to defer payments due under the TRA if we do not have available cash to satisfy our payment obligations under the TRA. Any such deferred payments under the TRA generally will accrue interest. In certain cases, payments under the TRA may be accelerated and/or significantly exceed the actual benefits, if any, we realize in respect of the tax attributes subject to the TRA. In these situations, our obligations under the TRA could have a substantial negative impact on our liquidity.
Assuming no material changes in the relevant tax law, we expect that if the TRA were terminated as of December 31, 2025, the estimated termination payments, based on the assumptions discussed in Note 11 of the notes to the Consolidated Financial Statements, would be approximately $251.2 million, calculated using a discount rate equal to the 12-month term SOFR published by CME Group Benchmark Administration Limited, plus 221.5 basis points, applied against an undiscounted liability of $348.4 million. A 10% increase in the price of our Class A common stock at December 31, 2025 would have
34
Table of Contents
increased the discounted liability by $7.6 million to $258.8 million (an undiscounted increase of $11.9 million to $360.3 million), and likewise, a 10% decrease in the price of our Class A common stock at December 31, 2025 would have decreased the discounted liability by $7.6 million to $243.6 million (an undiscounted decrease of $11.9 million to $336.6 million).
Cash Flows
Year Ended December 31, 2025 Compared to Year Ended December 31, 2024
The following table summarizes our cash flows for the periods indicated:
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in thousands) | |||||||||||
| Net cash provided by operating activities | $ | 258,417 | $ | 316,113 | |||||||
| Net cash used in investing activities | (39,063) | (35,388) | |||||||||
Net cash used in financing activities | (69,064) | (70,144) | |||||||||
Net cash provided by operating activities was $258.4 million in 2025 compared to $316.1 million in 2024. Operating cash flows decreased primarily due to lower earnings as well as an increase in cash outflows associated with working capital, largely related to purchases of inventory of $26.8 million, reflecting escalated values due to tariffs. These decreases in operating cash flows were partially offset by an increase in customer collections of $13.4 million.
Net cash used in investing activities was $39.1 million and $35.4 million for 2025 and 2024, respectively. The 2025 increase was primarily due to the initial investment of $6.0 million related to our joint venture in Vietnam intended to further diversify our manufacturing capabilities, partly offset by an increase in proceeds from sale of assets.
Net cash used in financing activities was $69.1 million for 2025 compared to net cash used by in financing activities of $70.1 million for 2024. The year ended December 31, 2025 value includes a $3.4 million decrease in share repurchases, primarily associated with the Company's share repurchase program, more than offset by higher dividend payments of approximately $3.8 million, a $2.4 million payment of deferred financing costs and a $2.3 million increase in member distributions. The year ended December 31, 2024 included a $6.0 million payment of contingent consideration.
Year Ended December 31, 2024 Compared to Year Ended December 31, 2023
The following table summarizes our cash flows for the periods indicated:
| Year Ended December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| (in thousands) | |||||||||||
| Net cash provided by operating activities | $ | 316,113 | $ | 340,280 | |||||||
| Net cash used in investing activities | (35,388) | (654,793) | |||||||||
Net cash provided by (used in) financing activities | (70,144) | 103,275 | |||||||||
Net cash provided by operating activities was $316.1 million in 2024 compared to $340.3 million in 2023. Operating cash flows decreased primarily due to an increase in cash outflows associated with working capital, largely related to increased purchases of inventory of $67.6 million as well as payout of the earn-out liability of $31.2 million. These decreases in operating cash flows were offset by an increase in customer collections of $24.9 million as well as an increase in operating income of $17.9 million in 2024 compared to 2023.
Net cash used in investing activities was $35.4 million and $654.8 million for 2024 and 2023, respectively. The decrease was primarily due to the non-recurrence of cash paid to acquire FlexSteel for $621.5 million, less $5.3 million in cash acquired during the first quarter of 2023. Additionally, our capital expenditures decreased approximately $4.8 million primarily due to the $7.0 million purchase of a previously leased facility during the first half of 2023.
Net cash used in financing activities was $70.1 million for 2024 compared to net cash provided by in financing activities of $103.3 million for 2023. The decrease in net cash provided by financing activities was primarily related to certain financing activities in 2023 associated with the FlexSteel acquisition. We received approximately $169.9 million of proceeds,
35
Table of Contents
net of issuance costs, from issuing shares of our Class A common stock during 2023. The year ended December 31, 2023 also included payments of approximately $6.9 million of debt issuance costs. The year ended December 31, 2024 includes a $4.1 million increase in share repurchases, primarily associated with the Company's share repurchase program, higher dividend payments of approximately $3.6 million and a $6.0 million payment related to the contingent consideration established as of the FlexSteel acquisition date. These increases are partially offset by a $3.4 million decrease in member distributions.
Critical Accounting Policies and Estimates
In preparing our financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”), we make numerous estimates and assumptions that affect the accounting for and recognition and disclosure of assets, liabilities, equity, revenues and expenses. We must make these estimates and assumptions because certain information that we use is dependent on future events, cannot be calculated with a high degree of precision from available data or is not otherwise capable of being readily calculated based on generally accepted methodologies. In some cases, these estimates are particularly difficult to determine, and we must exercise significant judgment. Actual results could differ materially from the estimates and assumptions that we use in the preparation of our financial statements. We identify certain accounting policies as critical based on, among other things, their impact on the portrayal of our financial condition and results of operations and the degree of difficulty, subjectivity and complexity in their deployment. Note 2 of the notes to the Consolidated Financial Statements includes a summary of the significant accounting policies used in the preparation of the accompanying consolidated financial statements. The following is a brief discussion of our most critical accounting policies and related estimates and assumptions.
Determination of Fair Value in Business Combinations
Accounting for the acquisition of a business requires the allocation of the purchase price to the various assets acquired and liabilities assumed at their respective fair values. The determination of fair value requires the use of significant estimates and assumptions, and in making these determinations, management uses all available information. For tangible and identifiable intangible assets acquired in a business combination, the determination of fair value utilizes several valuation methodologies including discounted cash flows which has assumptions with respect to the timing and amount of future revenue and expenses associated with an asset. The assumptions made in performing these valuations include, but are not limited to, discount rates, future revenues and operating costs, projections of capital costs, and other assumptions believed to be consistent with those used by principal market participants. Due to the specialized nature of these calculations, we engage third-party specialists to assist management in evaluating our assumptions as well as appropriately measuring the fair value of assets acquired and liabilities assumed.
Inventories
Inventories are stated at the lower of cost or net realizable value. Cost is determined using standard cost (which approximates average cost). Costs include an application of related direct labor and overhead cost. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. We evaluate the components of inventory on a regular basis for excess and obsolescence. Reserves are made based on a range of factors, including age, usage and technological or market changes that may impact demand for those products. The amount of reserve recorded is subjective and is susceptible to change from period to period.
Long‑Lived Assets
Key estimates related to long‑lived assets include useful lives and recoverability of carrying values. Such estimates could be modified, as impairment could arise as a result of changes in supply and demand fundamentals, technological developments, new competitors with disruptive technologies or cost advantages and the cyclical nature of the oil and gas industry. We evaluate long‑lived assets for potential impairment indicators whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Long‑lived assets assessed for impairment are grouped at the lowest level for which identifiable cash flows are available, and a provision would be made where the cash flow is less than the carrying value of the asset. The estimation of future cash flows and fair value is highly subjective and inherently imprecise. Estimates can change materially from period to period based on many factors. Accordingly, if conditions change in the future, we may record impairment losses, which could be material to any particular reporting period.
36
Table of Contents
Goodwill
Goodwill represents the excess of purchase price paid over the fair value of the net assets of acquired businesses. Goodwill is not amortized, but we evaluate at least annually whether it is impaired. Goodwill is considered impaired if the carrying amount of the reporting unit exceeds its estimated fair value. We conduct our annual assessment of the recoverability of goodwill as of December 31 of each year. We first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the goodwill impairment test. If the qualitative assessment indicates that it is more likely than not that the fair value of the reporting unit is less than its carrying amount or we elect not to perform a qualitative assessment, the quantitative assessment of goodwill test is performed. The goodwill impairment test is also performed whenever events or changes in circumstances indicate that the carrying value may not be recoverable. If it is necessary to perform the quantitative assessment to determine if our goodwill is impaired, we will utilize a discounted cash flow analysis using management’s projections that are subject to various risks and uncertainties of revenues, expenses and cash flows as well as assumptions regarding discount rates, terminal value and control premiums. Estimates of future cash flows and fair value are highly subjective and inherently imprecise.
Income Taxes
Deferred taxes are recorded using the asset and liability method, whereby tax assets and liabilities are determined based on the differences between the financial statement and tax basis of assets and liabilities using enacted tax laws and rates expected to apply to taxable income in the year in which the differences are expected to reverse. We assess the likelihood that our deferred tax assets will be recovered through adjustments to future taxable income. To the extent we believe recovery is not likely, we establish a valuation allowance to reduce the asset to a value we believe will be recoverable based on our expectation of future taxable income. In evaluating our ability to recover our deferred tax assets, we consider all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and results of recent operations. The assumptions about future taxable income require significant judgment and are consistent with the plans and estimates management is using to manage the underlying business. If the projected future taxable income changes materially, we may be required to reassess the amount of valuation allowance recorded against our deferred tax assets.
Tax Receivable Agreement
The TRA generally provides for the payment by Cactus Inc. to the TRA Holders of 85% of the net cash savings, if any, in U.S. federal, state and local income tax and franchise tax that Cactus Inc. actually realizes or is deemed to realize in certain circumstances as a result of (i) certain increases in tax basis that occur as a result of Cactus Inc.’s acquisition (or deemed acquisition for U.S. federal income tax purposes) of all or a portion of such TRA Holder’s CW Units in connection with our IPO or any subsequent offering (or, following the completion of the CC Reorganization, such TRA Holder’s CC Units), or pursuant to any other exercise of the Redemption Right or the Call Right, (ii) certain increases in tax basis resulting from the repayment of borrowings outstanding under Cactus LLC’s term loan facility in connection with our IPO and (iii) imputed interest deemed to be paid by Cactus Inc. as a result of, and additional tax basis arising from, any payments Cactus Inc. makes under the TRA. We retain the remaining 15% of the cash savings. The TRA liability is calculated by determining the tax basis subject to the TRA (“tax basis”) and applying a blended tax rate to the basis differences and calculating the iterative impact. The blended tax rate consists of the U.S. federal income tax rate and an assumed combined state and local income tax rate driven by the apportionment factors applicable to each state.
Redemptions of CC Units (CW Units prior to the CC Reorganization) result in adjustments to the tax basis of the tangible and intangible assets of Cactus Companies (Cactus LLC prior to the CC Reorganization). These adjustments are allocated to Cactus Inc. Such adjustments to the tax basis of the tangible and intangible assets of Cactus Companies would not be available to Cactus Inc. absent its acquisition or deemed acquisition of CC Units or CW Units prior to the CC Reorganization. In addition, the repayment of borrowings outstanding under the Cactus LLC term loan facility resulted in adjustments to the tax basis of the tangible and intangible assets of Cactus LLC, a portion of which was allocated to Cactus Inc. These basis adjustments are expected to increase (for tax purposes) Cactus Inc.’s depreciation and amortization deductions and may also decrease Cactus Inc.’s gains (or increase its losses) on future dispositions of certain assets to the extent tax basis is allocated to those assets. Such increased deductions and losses and reduced gains may reduce the amount of tax that Cactus Inc. would otherwise be required to pay in the future.
Estimating the amount and timing of the tax benefit is by its nature imprecise and the assumptions used in the estimates can change. The tax benefit is dependent upon future events and assumptions, the amount of the redeeming unit holders’ tax basis in its CC Units (formerly CW Units) at the time of the relevant redemption, the depreciation and amortization
37
Table of Contents
periods that apply to the increase in tax basis, the amount and timing of taxable income we generate in the future and the U.S. federal, state and local income tax rate then applicable, and the portion of Cactus Inc.’s payments under the TRA that constitute imputed interest or give rise to depreciable or amortizable tax basis. The most critical estimate included in calculating the TRA liability to record is the combined U.S. federal income tax rate and an assumed combined state and local income tax rate, to determine the future benefit we will realize. A 100 basis point decrease/increase in the blended tax rate used would decrease/increase the TRA liability recorded at December 31, 2025 by approximately $14.4 million.
Recent Accounting Pronouncements
See Note 2 of the notes to the Consolidated Financial Statements for discussion of recent accounting pronouncements.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
In the normal course of business, we are exposed to market risk from changes in foreign currency exchange rates and changes in interest rates.
Foreign Currency Exchange Rate Risk
We have subsidiaries with operations in China, Australia, Canada and Vietnam who conduct business in their local currencies (functional currencies) and are therefore subject to foreign currency exchange rate risk on cash flows related to sales, expenses, financing and investing transactions in currencies other than the U.S. dollar. Currently, we do not have any open foreign currency forward contracts to hedge this risk.
Additionally, certain intercompany balances between our U.S. and foreign subsidiaries as well as other financial assets and liabilities are denominated in U.S. dollars. Since this is not the functional currency of our foreign subsidiaries, the changes in these balances are translated in our Consolidated Statements of Income, resulting in the recognition of a remeasurement gain or loss. In order to provide a hedge against currency fluctuations on the U.S. dollar denominated assets and liabilities held by certain of our foreign subsidiaries, we enter into monthly foreign currency forward contracts (balance sheet hedges) to attempt to offset the remeasurement gain or loss recorded at the foreign subsidiary. As of December 31, 2025, if the U.S. dollar strengthened or weakened 5%, the impact to the unrealized value of our forward contracts would be less than $0.1 million. The gain or loss on the forward contracts would be largely offset by the gain or loss on the underlying foreign subsidiary assets and liabilities, and therefore, would have minimal impact on future earnings.
Interest Rate Risk
Our Amended ABL Credit Facility (as defined in Note 6 in the notes to the Consolidated Financial Statements) is variable rate debt. At December 31, 2025, there were no borrowings outstanding. Borrowings under our Amended ABL Credit Facility and Term Loan Facility bear interest at Cactus Company’s option at either the Alternate Base Rate (as defined therein) or the Adjusted Term SOFR Rate (as defined therein), plus, in each case, an applicable margin.
38
Table of Contents
Item 8. Financial Statements and Supplementary Data
The following Consolidated Financial Statements are filed as part of this Annual Report:
Cactus, Inc. and Subsidiaries
Management’s Report on Internal Control Over Financial Reporting | 40 | ||||
Report of Independent Registered Public Accounting Firm (PCAOB ID | 41 | ||||
Consolidated Balance Sheets as of December 31, 2025 and 2024 | 43 | ||||
Consolidated Statements of Income for the Years Ended December 31, 2025, 2024 and 2023 | 44 | ||||
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2025, 2024 and 2023 | 45 | ||||
Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2025, 2024 and 2023 | 46 | ||||
Consolidated Statements of Cash Flows for the Years Ended December 31, 2025, 2024 and 2023 | 47 | ||||
Notes to the Consolidated Financial Statements | 48 | ||||
39
Table of Contents
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended. Our internal control over financial reporting was designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In making its assessment, management has utilized the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (or “COSO”) in Internal Control-Integrated Framework (2013 framework). Based on this assessment, management has concluded that, as of December 31, 2025, our internal control over financial reporting was effective.
Our independent registered public accounting firm, PricewaterhouseCoopers, LLP, has issued an audit report on the effectiveness of our internal control over financial reporting as of December 31, 2025, which appears herein.
| /s/ Scott Bender | /s/ Jay A. Nutt | |||||||
| Chief Executive Officer, Chairman of the Board and Director | Executive Vice President and Chief Financial Officer | |||||||
| Houston, Texas | ||||||||
February 26, 2026 | ||||||||
40
Table of Contents
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of Cactus, Inc.
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of Cactus, Inc. and its subsidiaries (the "Company") as of December 31, 2025 and 2024, and the related consolidated statements of income, of comprehensive income, of stockholders' equity and of cash flows for each of the three years in the period ended December 31, 2025, including the related notes (collectively referred to as the "consolidated financial statements"). We also have audited the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
41
Table of Contents
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Liability related to the Tax Receivable Agreement
As described in Note 11 to the consolidated financial statements, the Company has a liability under the Tax Receivable Agreement ("TRA") of $262.9 million as of December 31, 2025. In connection with its initial public offering, the Company entered into the TRA with certain direct and indirect owners of Cactus LLC (the "TRA Holders"). The TRA generally provides for the payment by the Company to the TRA Holders of 85% of the net cash savings, if any, in United States federal, state and local income tax and franchise tax that the Company actually realizes or is deemed to realize in certain circumstances as a result of (i) certain increases in tax basis that occur as a result of the Company's acquisition (or deemed acquisition for U.S. federal income tax purposes) of all or a portion of such TRA Holder’s ownership interest in Cactus, LLC (ii) certain increases in tax basis resulting from the repayment of borrowings outstanding under Cactus LLC’s term loan facility, and (iii) imputed interest deemed to be paid by the Company as a result of, and additional tax basis arising from, any payments the Company makes under the TRA. Management calculates the TRA liability by determining the tax basis subject to the TRA (“tax basis”) and applying a blended tax rate to the basis differences and calculating the iterative impact. The blended tax rate consists of the U.S. federal income tax rate and an assumed combined state and local income tax rate driven by the apportionment factors applicable to each state.
The principal considerations for our determination that performing procedures relating to the liability related to the TRA is a critical audit matter are (i) a high degree of auditor subjectivity and effort in performing procedures and evaluating audit evidence related to management’s calculation of the tax basis and development of applicable state apportionment factors utilized in determining the blended tax rate and (ii) the audit effort involved the use of professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to relating to the calculation and recognition of the TRA liability, including controls over the completeness and accuracy of the underlying data used in the tax basis and blended tax rate calculations. These procedures also included, among others, testing the completeness and accuracy of the underlying information used in the calculation of the TRA liability, and the involvement of professionals with specialized skill and knowledge to assist in (i) developing an independent calculation of the tax basis, (ii) comparing the independent calculation to management’s calculations to evaluate the reasonableness of the tax basis, (iii) evaluating the apportionment factors and the resulting blended tax rate, and (iv) assessing management’s application of the tax laws. Evaluating management’s determination of the apportionment factors involved considering the current and expected activity levels of the Company and whether the apportionment factors were consistent with evidence obtained in other areas of the audit.
/s/ PricewaterhouseCoopers LLP
February 26, 2026
We have served as the Company’s auditor since 2015, which includes periods before the Company became subject to SEC reporting requirements.
42
Table of Contents
CACTUS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
| December 31, | |||||||||||
| (in thousands, except per share data) | 2025 | 2024 | |||||||||
| Assets | |||||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
Restricted cash | |||||||||||
Accounts receivable, net of allowance of $ | |||||||||||
| Inventories | |||||||||||
| Prepaid expenses and other current assets | |||||||||||
| Total current assets | |||||||||||
| Property and equipment, net | |||||||||||
| Operating lease right-of-use assets, net | |||||||||||
| Intangible assets, net | |||||||||||
| Goodwill | |||||||||||
| Deferred tax asset, net | |||||||||||
Investment in unconsolidated affiliates | |||||||||||
| Other noncurrent assets | |||||||||||
| Total assets | $ | $ | |||||||||
| Liabilities and Equity | |||||||||||
| Current liabilities | |||||||||||
| Accounts payable | $ | $ | |||||||||
| Accrued expenses and other current liabilities | |||||||||||
| Current portion of liability related to tax receivable agreement | |||||||||||
| Finance lease obligations, current portion | |||||||||||
| Operating lease liabilities, current portion | |||||||||||
| Total current liabilities | |||||||||||
| Deferred tax liability, net | |||||||||||
| Liability related to tax receivable agreement, net of current portion | |||||||||||
| Finance lease obligations, net of current portion | |||||||||||
| Operating lease liabilities, net of current portion | |||||||||||
Other noncurrent liabilities | |||||||||||
| Total liabilities | |||||||||||
| Commitments and contingencies | |||||||||||
| Stockholders’ equity | |||||||||||
Preferred stock, $ | |||||||||||
Class A common stock, $ | |||||||||||
Class B common stock, $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Retained earnings | |||||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
| Total stockholders’ equity attributable to Cactus Inc. | |||||||||||
| Non-controlling interest | |||||||||||
| Total stockholders’ equity | |||||||||||
| Total liabilities and equity | $ | $ | |||||||||
The accompanying notes are an integral part of these consolidated financial statements.
43
Table of Contents
CACTUS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands, except per share data) | |||||||||||||||||
| Revenues | |||||||||||||||||
| Product revenue | $ | $ | $ | ||||||||||||||
| Rental revenue | |||||||||||||||||
| Field service and other revenue | |||||||||||||||||
| Total revenues | |||||||||||||||||
| Costs and expenses | |||||||||||||||||
| Cost of product revenue | |||||||||||||||||
| Cost of rental revenue | |||||||||||||||||
| Cost of field service and other revenue | |||||||||||||||||
| Selling, general and administrative expenses | |||||||||||||||||
| Change in fair value of earn-out liability | |||||||||||||||||
| Total costs and expenses | |||||||||||||||||
| Operating income | |||||||||||||||||
| Interest income (expense), net | ( | ||||||||||||||||
Other (expense) income, net | ( | ||||||||||||||||
| Income before income taxes | |||||||||||||||||
| Income tax expense | |||||||||||||||||
| Net income | $ | $ | $ | ||||||||||||||
| Less: net income attributable to non-controlling interest | |||||||||||||||||
| Net income attributable to Cactus Inc. | $ | $ | $ | ||||||||||||||
| Earnings per Class A share - basic | $ | $ | $ | ||||||||||||||
| Earnings per Class A share - diluted | $ | $ | $ | ||||||||||||||
| Weighted average Class A shares outstanding - basic | |||||||||||||||||
| Weighted average Class A shares outstanding - diluted | |||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
44
Table of Contents
CACTUS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
| Net income | $ | $ | $ | ||||||||||||||
| Foreign currency translation adjustments | ( | ||||||||||||||||
| Comprehensive income | |||||||||||||||||
| Less: comprehensive income attributable to non-controlling interest | |||||||||||||||||
| Comprehensive income attributable to Cactus Inc. | $ | $ | $ | ||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
45
Table of Contents
CACTUS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
| Class A Common Stock | Class B Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Non-controlling Interest | Total Equity | |||||||||||||||||||||||||||||||||||||||||||||||
| (in thousands) | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2022 | $ | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Member distributions | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Effect of CW Unit redemptions | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
| Tax impact of equity transactions | — | — | — | — | ( | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Equity award vestings | — | — | ( | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Share repurchases | ( | — | — | — | ( | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared ($ | — | — | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2023 | $ | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
| Member distributions | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Effect of CC Unit redemptions | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
| Tax impact of equity transactions | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Equity award vestings | — | — | ( | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | — | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Share repurchases | ( | ( | — | — | ( | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared ($ | — | — | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
| Member distributions | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Effect of CC Unit redemptions | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Tax impact of equity transactions | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Equity award vestings | — | — | ( | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared ($ | — | — | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
46
Table of Contents
CACTUS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Year Ended December 31, | |||||||||||||||||
| (in thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| Cash flows from operating activities | |||||||||||||||||
| Net income | $ | $ | $ | ||||||||||||||
| Reconciliation of net income to net cash provided by operating activities: | |||||||||||||||||
| Depreciation and amortization | |||||||||||||||||
| Deferred financing cost amortization | |||||||||||||||||
| Stock-based compensation | |||||||||||||||||
| Provision for expected credit losses | |||||||||||||||||
| Inventory obsolescence | |||||||||||||||||
| Gain on disposal of assets | ( | ( | ( | ||||||||||||||
| Deferred income taxes | |||||||||||||||||
| Change in fair value of earn-out liability | |||||||||||||||||
| (Gain) loss from revaluation of liability related to tax receivable agreement | ( | ( | |||||||||||||||
| Changes in operating assets and liabilities: | |||||||||||||||||
| Accounts receivable | ( | ||||||||||||||||
| Inventories | ( | ( | |||||||||||||||
| Prepaid expenses and other assets | ( | ( | |||||||||||||||
| Accounts payable | ( | ||||||||||||||||
| Accrued expenses and other liabilities | ( | ( | |||||||||||||||
| Payments pursuant to tax receivable agreement | ( | ( | ( | ||||||||||||||
Payment of earn-out liability | ( | ||||||||||||||||
| Net cash provided by operating activities | |||||||||||||||||
| Cash flows from investing activities | |||||||||||||||||
| Acquisition of a business, net of cash and cash equivalents acquired | ( | ||||||||||||||||
Investment in unconsolidated affiliates | ( | ||||||||||||||||
| Capital expenditures and other | ( | ( | ( | ||||||||||||||
| Proceeds from sale of assets | |||||||||||||||||
| Net cash used in investing activities | ( | ( | ( | ||||||||||||||
| Cash flows from financing activities | |||||||||||||||||
| Proceeds from the issuance of long-term debt | |||||||||||||||||
| Repayments of borrowings of long-term debt | ( | ||||||||||||||||
| Net proceeds from the issuance of Class A common stock | |||||||||||||||||
Payment of contingent consideration | ( | ||||||||||||||||
| Payments of deferred financing costs | ( | ( | |||||||||||||||
| Payments on finance leases | ( | ( | ( | ||||||||||||||
| Dividends paid to Class A common stock shareholders | ( | ( | ( | ||||||||||||||
| Distributions to members | ( | ( | ( | ||||||||||||||
| Repurchases of shares | ( | ( | ( | ||||||||||||||
Net cash (used in) provided by financing activities | ( | ( | |||||||||||||||
| Effect of exchange rate changes on cash and cash equivalents | ( | ||||||||||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | ( | ||||||||||||||||
Cash, cash equivalents and restricted cash | |||||||||||||||||
| Beginning of period | |||||||||||||||||
| End of period | $ | $ | $ | ||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
47
Table of Contents
CACTUS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, or as otherwise indicated)
1.Organization and Nature of Operations
Cactus, Inc. (“Cactus Inc.”) and its consolidated subsidiaries (the “Company”), including Cactus Companies, LLC (“Cactus Companies”) are primarily engaged in the design, manufacture, sale and rental of highly engineered pressure control and spoolable pipe technologies. Our products are sold and rented principally for onshore unconventional oil and gas wells and are utilized during the drilling, completion and production phases of our customers’ wells. We also provide field services for all of our products and rental items to assist with the installation, maintenance and handling of the equipment. Additionally, we offer repair and refurbishment services for pressure control equipment. We operate through service centers and pipe yards located in the United States, Canada and Australia. We also provide rental and service operations in the Middle East and other select international markets. We have manufacturing and production facilities in Bossier City, Louisiana, Baytown, Texas and Suzhou, China. In addition, a new plant is commencing production in Vietnam. Our corporate headquarters are located in Houston, Texas.
Cactus Inc. was incorporated on February 17, 2017 as a Delaware corporation for the purpose of completing an initial public offering of equity and related transactions, which was completed on February 12, 2018 (our “IPO”). Cactus Inc. is a holding company whose only material asset is an equity interest consisting of units representing limited liability company interests in Cactus Companies (“CC Units”). Cactus Inc. is the sole managing member of Cactus Companies and is responsible for all operational, management and administrative decisions relating to Cactus Companies’ business. Pursuant to the Amended and Restated Limited Liability Company Operating Agreement of Cactus Companies (the “Cactus Companies LLC Agreement”), owners of CC Units are entitled to redeem their CC Units for shares of Cactus Inc.’s Class A common stock, par value $0.01 per share (“Class A common stock”) on a one-for-one basis, which results in a corresponding increase in Cactus Inc.’s membership interest in Cactus Companies and an increase in the number of shares of Class A common stock outstanding. We refer to the owners of CC Units, other than Cactus Inc. (along with their permitted transferees), as “CC Unit Holders.” CC Unit Holders own one share of our Class B common stock, par value $0.01 per share (“Class B common stock”) for each CC Unit such CC Unit Holder owns. Except as otherwise indicated or required by the context, all references to “Cactus,” “we,” “us” and “our” refer to Cactus Inc. and its consolidated subsidiaries (including Cactus Companies).
On February 28, 2023, Cactus Inc. through one of its subsidiaries, completed the acquisition of the FlexSteel business (the “Merger”) through a merger with HighRidge Resources, Inc. and its subsidiaries (“HighRidge”). On February 27, 2023, in order to facilitate the Merger with HighRidge, an internal reorganization was completed in which Cactus Companies acquired all of the outstanding units representing ownership interests in Cactus Wellhead, LLC (“Cactus LLC”), the operating subsidiary of Cactus Inc. (the “CC Reorganization”). The purpose of the Merger was to effect the acquisition of the operations of FlexSteel Holdings, Inc. and its subsidiaries. FlexSteel Holdings, Inc. was a wholly-owned subsidiary of HighRidge prior to the Merger and was converted into a limited liability company, contributed from HighRidge to Cactus Companies as part of the CC Reorganization and is now named FlexSteel Holdings, LLC (“FlexSteel”). The results of operations of FlexSteel have been reflected in our accompanying condensed consolidated financial statements from the closing date of the acquisition. See further discussion of the acquisition in Note 3.
2.Summary of Significant Accounting Policies and Other Items
Basis of Presentation
The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). These consolidated financial statements include the accounts of Cactus Inc. and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated upon consolidation.
48
Table of Contents
Investments in Unconsolidated Affiliates
In November 2023, the Company entered into an agreement to invest in a Vietnam forging manufacturing facility for an ownership percentage of 40 %. In January 2025, the Company provided an initial capital contribution of $6.0 million. In late 2025 the parties decided not to proceed with the development of the facility and are in the process of liquidating the assets and returning the capital to the respective parties. The investment in a company in which Cactus does not have a controlling financial interest, but over which it has significant influence, is accounted for using the equity method. The Company's share of the after-tax earnings of the equity method investment was recorded in field service and other revenue in the consolidated statements of income.
Use of Estimates
Concentrations of Credit Risk
Significant Vendors
Tax Receivable Agreement (TRA)
49
Table of Contents
Revenue Recognition
The majority of our revenues are derived from short-term contracts for fixed consideration, or in the case of equipment rentals, for a fixed charge per day while the equipment is in use by the customer. Product sales generally do not include right of return or other significant post-delivery obligations. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Revenues are recognized when we satisfy a performance obligation by transferring control of the promised goods or providing services to our customers at a point in time, in an amount specified in the contract with our customer and that reflects the consideration to which we expect to be entitled in exchange for those goods or services. The majority of our contracts with customers contain a single performance obligation to provide agreed upon products or services. For contracts with multiple performance obligations, we allocate revenue to each performance obligation based on its relative standalone selling price. We do not assess whether promised goods or services are performance obligations if they are immaterial in the context of the contract with the customer. We do not incur any material costs of obtaining contracts.
We do not adjust the amount of consideration per the contract for the effects of a significant financing component when we expect, at contract inception, that the period between the transfer of a promised good or service to a customer and when the customer pays for that good or service will be one year or less, which is in substantially all cases. Payment terms and conditions vary, although terms generally include a requirement of payment within 30 to 60 days. Revenues are recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities. We treat shipping and handling associated with outbound freight as a fulfillment cost instead of as a separate performance obligation. We recognize the cost for the associated shipping and handling when incurred as an expense in cost of sales. Our revenues are derived from three sources: products, rentals, and field service and other:
Product revenue. Product revenues are primarily derived from the sale of wellhead systems, production trees, spoolable pipe and connections. Revenue is recognized when the customer obtains control of the products.
Rental revenue. Rental revenues are primarily derived from the rental of equipment, tools and products to customers used for well control as well as rental of equipment used for pipe installation. Our rental agreements are directly with our customers and provide for a rate based primarily on the period of time the equipment is used or made available to the customer. In addition, customers are charged for repair costs for our frac equipment, typically through an agreed upon rate for each rental job. Revenue is recognized ratably over the rental period, which tends to be short-term in nature with most equipment on site for less than 90 days.
Foreign Currency Translation
The financial position and results of operations of our foreign subsidiaries are measured using the local currency as the functional currency. Revenues and expenses of the subsidiaries have been translated into U.S. dollars at average exchange rates prevailing during the period. Assets and liabilities have been translated at the rates of exchange on the balance sheet dates. The resulting translation gain and loss adjustments have been recorded directly as a separate component of other comprehensive income in the consolidated statements of comprehensive income and stockholders’ equity. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in our consolidated statements of income as incurred.
Derivative Financial Instruments
We utilize a hedging program to reduce the risks associated with changes in the value of monetary assets and liabilities denominated in currencies other than the functional currency of our subsidiaries. Under this program, we utilize foreign currency forward contracts to offset gains or losses recorded upon remeasurement of assets and liabilities stated in the non-functional currencies of our subsidiaries. These forward contracts are not designated as hedges for accounting purposes. As such, we record changes in fair value of the forward contracts in our consolidated statements of income along with the gain or loss resulting from remeasurement of the U.S. dollar denominated financial assets and liabilities held by our foreign subsidiaries. The forward contracts are typically only 30 days in duration and are settled and renewed each month. As of December 31, 2025 and 2024, the fair value of our forward contracts was immaterial.
50
Table of Contents
Stock-based Compensation
We measure the cost of equity‑based awards on the grant date fair value and allocate the compensation expense over the requisite service period, which is usually the vesting period. The grant date fair value is determined by the closing price of our Class A common stock on the grant date.
Income Taxes
Deferred taxes are recorded using the asset and liability method, whereby tax assets and liabilities are determined based on the differences between the financial statement and tax basis of assets and liabilities using enacted tax laws and rates expected to apply to taxable income in the year in which the differences are expected to reverse. We regularly evaluate the valuation allowances established for deferred tax assets for which future realization is uncertain. In assessing the realizability of deferred tax assets, we consider both positive and negative evidence, including scheduled reversals of deferred tax assets and liabilities, projected future taxable income, tax planning strategies and results of recent operations. If, based on the weight of available evidence, it is more likely than not that the deferred tax assets will not be realized, a valuation allowance is recorded.
Cactus Inc. is a corporation and is subject to U.S. federal as well as state income tax related to its ownership percentage in Cactus Companies. Cactus Companies is a Delaware limited liability company treated as a partnership for U.S. federal income tax purposes and files a U.S. Return of Partnership Income, which includes both our U.S. and foreign operations. Consequently, the members of Cactus Companies are taxed individually on their share of earnings for U.S. federal and state income tax purposes. Cactus Companies is subject to the Texas Margins Tax and our operations in China, Australia, Canada, Vietnam and the Middle East are subject to local country income taxes. See Note 7 for additional information regarding income taxes.
Cash and Cash Equivalents
Cash in excess of current operating requirements is invested in short-term interest-bearing investments with maturities of three months or less at the date of purchase and is stated at cost, which approximates fair value. Throughout the year we maintained cash balances that were not covered by federal deposit insurance. We have not experienced any losses in such accounts.
Restricted Cash
Restricted cash represents amounts that are not available for general corporate use because they are subject to contractual or legal restrictions. Consistent with U.S. GAAP, the Company presents restricted cash separately from cash and cash equivalents on the consolidated balance sheets and includes restricted cash in the reconciliation of beginning and ending cash, cash equivalents, and restricted cash in the consolidated statements of cash flows.
As of December 31, 2025 the Company had $371.0 million of restricted cash held in an escrow account in connection with the then-pending acquisition of Baker Hughes Pressure Control LP. Under the terms of the purchase agreement, these funds were required to be placed in escrow and were restricted from use for any purpose other than funding the acquisition consideration at closing. The escrowed funds were released on January 1, 2026, the acquisition closing date, at which point the restriction lapsed and the cash was released to certain affiliates of Baker Hughes Company. For information concerning the Baker Hughes Transaction, see Note 19 to our consolidated financial statements.
The restricted cash balance is classified as a current asset, as the restriction was scheduled to be released within one year of the balance sheet date.
The following table provides a reconciliation of the amounts presented in the consolidated balance sheets to the total amounts shown in the consolidated statements of cash flows:
| December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | |||||||||||||||||
Restricted cash | ||||||||||||||||||||
Total cash, cash equivalents and restricted cash | $ | $ | $ | |||||||||||||||||
51
Table of Contents
Accounts Receivable and Allowance for Credit Losses
We extend credit to customers in the normal course of business. Our customers are predominantly oil and gas E&P companies in the United States. Our receivables are short-term in nature and typically due in 30 to 60 days. We do not accrue interest on delinquent receivables. Accounts receivable includes amounts billed and currently due from customers and unbilled amounts for products delivered and services performed for which billings have not yet been submitted to the customers. Total unbilled revenue included in accounts receivable as of December 31, 2025 and 2024 was $39.4 million and $29.8 million, respectively.
| Balance at Beginning of Period | Expense | Write off | Other | Balance at End of Period | |||||||||||||||||||||||||
| Year Ended December 31, 2025 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||
| Year Ended December 31, 2024 | ( | ||||||||||||||||||||||||||||
| Year Ended December 31, 2023 | ( | ( | |||||||||||||||||||||||||||
Inventories
| Balance at Beginning of Period | Expense | Write off | Translation Adjustments | Balance at End of Period | |||||||||||||||||||||||||
| Year Ended December 31, 2025 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||
| Year Ended December 31, 2024 | ( | ( | |||||||||||||||||||||||||||
| Year Ended December 31, 2023 | ( | ||||||||||||||||||||||||||||
Property and Equipment
52
Table of Contents
| Land | N/A | |||||||||||||
| Buildings and improvements | - | years | ||||||||||||
| Machinery and equipment | - | years | ||||||||||||
| Reels and skids | - | years | ||||||||||||
| Vehicles | - | years | ||||||||||||
| Rental equipment | - | years | ||||||||||||
| Furniture and fixtures | years | |||||||||||||
| Computers and software | - | years | ||||||||||||
Property and equipment as of December 31, 2025 and 2024 consists of the following:
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Land | $ | $ | |||||||||
| Buildings and improvements | |||||||||||
| Machinery and equipment | |||||||||||
| Reels and skids | |||||||||||
| Vehicles | |||||||||||
| Rental equipment | |||||||||||
| Furniture and fixtures | |||||||||||
| Computers and software | |||||||||||
| Gross property and equipment | |||||||||||
| Less: Accumulated depreciation | ( | ( | |||||||||
| Net property and equipment | |||||||||||
| Construction in progress | |||||||||||
| Total property and equipment, net | $ | $ | |||||||||
Depreciation and amortization was $63.9 million, $60.4 million and $65.0 million for 2025, 2024 and 2023, respectively. Depreciation and amortization expense is included in the consolidated statements of income as follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Cost of product revenue | $ | $ | $ | ||||||||||||||
| Cost of rental revenue | |||||||||||||||||
| Cost of field service and other revenue | |||||||||||||||||
| Selling, general and administrative expenses | |||||||||||||||||
| Total depreciation and amortization | $ | $ | $ | ||||||||||||||
Impairment of Long‑Lived Assets
We review the recoverability of long‑lived assets, including finite-lived acquired intangible assets and property and equipment, when events or changes in circumstances occur that indicate the carrying value of the asset or asset group may not be recoverable. The assessment of possible impairment is based on our ability to recover the carrying value of the asset or asset group from the expected future pre‑tax cash flows (undiscounted) of the related operations. If these cash flows are less than the carrying value of such asset, an impairment loss is recognized for the difference between estimated fair value and carrying value. We concluded there were no indicators evident or other circumstances present that these assets were not recoverable and accordingly, no
53
Table of Contents
Goodwill
Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities as of December 31, 2025 and 2024 are as follows:
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Accrued professional fees and other | $ | $ | |||||||||
| Payroll, incentive compensation, payroll taxes and benefits | |||||||||||
| Accrued international freight and tariffs | |||||||||||
| Deferred revenue | |||||||||||
| Customer deposits | |||||||||||
| Taxes other than income | |||||||||||
| Income based tax payable | |||||||||||
| Product warranties | |||||||||||
| Accrued dividends | |||||||||||
| Total accrued expenses and other current liabilities | $ | $ | |||||||||
Self-Insurance Accrued Expenses
We maintain a partially self-insured health benefit plan which provides medical and prescription drug benefits to certain of our employees electing coverage under the plan. Our exposure is limited by individual and aggregate stop loss limits through third-party insurance carriers. Our self-insurance expense is accrued based upon the aggregate of the expected liability for reported claims and the estimated liability for claims incurred but not reported, based on historical claims experience provided by our third-party insurance advisors, adjusted as necessary based upon management’s reasoned judgment. Actual employee medical claims expense may differ from estimated loss provisions based on historical experience. The liabilities for these claims are included as a component of payroll, incentive compensation, payroll taxes and benefits in the table above and were $2.0 million and $2.3 million at December 31, 2025 and 2024, respectively.
Product Warranties
We generally warrant our wellhead manufactured products for 12 months and our manufactured spoolable pipe and connections for up to 24 months from the date placed in service. The estimated liability for product warranties is based on historical and current claims experience.
54
Table of Contents
Employee Benefit Plans
Recent Accounting Pronouncements
Recently adopted accounting pronouncements
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-09, “Income Taxes (Topic 740).” The amendments in this ASU require entities to disclose on an annual basis specific categories in the income tax rate reconciliation and provide additional disclosures for reconciling items that meet a specified quantitative threshold. Entities will also be required to disclose annually income taxes paid disaggregated by federal, state and foreign taxes and the amount of income taxes paid by individual jurisdictions that meet a five percent or greater threshold of total income taxes paid net of refunds received. The Company adopted ASU 2023-09 on a prospective basis during the year ended December 31, 2025. See Note 7 Income Taxes in the accompanying notes to the consolidated financial statements for further detail.
Standards Not Yet Adopted
In November 2024, the FASB issued ASU 2024-03, Income Statement- Reporting Comprehensive Income- Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The new standard would require public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2024-03.
In September 2025, the FASB issued ASU 2025-06, Targeted Improvements to the Accounting for Internal-Use Software. This standard update modernizes the capitalization criteria for internal-use software, eliminating references to project stages and instead requiring that projects meet completion probability criteria before costs can be capitalized. This guidance is effective for annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of these amendments but does not anticipate that adoption will have a material impact on the Company's results of operations or financial position.
3.FlexSteel Acquisition
On February 28, 2023 (the “acquisition date”), we completed the acquisition of FlexSteel in accordance with the terms and conditions of the merger agreement dated December 30, 2022. Including final adjustments for closing working capital, cash on hand and indebtedness adjustments as set forth in the merger agreement, we paid total cash consideration of $627.5 million.
Pro forma financial information
The pro forma financial information below represents the combined results of operations for the year ended December 31, 2023, as if the acquisition had occurred as of January 1, 2022. The unaudited pro forma combined financial information includes, where applicable, adjustments for additional amortization expense related to the fair value step-up of intangible assets, additional inventory fair value step-up expense, additional depreciation expense associated with adjusting property and equipment to fair value, decreases in interest expense due to modification of borrowings in conjunction with the acquisition and associated tax-related impacts of adjustments. These pro forma adjustments are based upon assumptions that we believe are reasonable to reflect the impact of the FlexSteel acquisition on our historical financial information on a supplemental pro forma basis. Adjustments do not include the elimination of transaction-related costs incurred or any costs related to integration activities, cost savings or synergies that have been or may be achieved by the combined business. The unaudited pro forma financial information is presented for informational purposes only and is neither indicative of the results of operations that would have occurred if the acquisition had taken place at the beginning of the period presented nor indicative of future operating results.
55
Table of Contents
| Year Ended December 31, | |||||
| 2023 | |||||
| Revenues | $ | ||||
| Net Income attributable to Cactus, Inc. | |||||
4.Inventories
Inventories consist of the following:
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Raw materials | $ | $ | |||||||||
| Work-in-progress | |||||||||||
| Finished goods | |||||||||||
| Total inventories | $ | $ | |||||||||
5.Other Intangible Assets
The following table presents the detail of acquired intangible assets other than goodwill as of December 31, 2025:
| Amortization Period | Gross Cost | Accumulated Amortization | Net Book Value | |||||||||||||||||||||||
| Customer relationships | $ | $ | ( | $ | ||||||||||||||||||||||
| Developed technology | ( | |||||||||||||||||||||||||
| Tradename | ( | |||||||||||||||||||||||||
| Backlog | ( | |||||||||||||||||||||||||
| Total | $ | $ | ( | $ | ||||||||||||||||||||||
All intangible assets are amortized over their estimated useful lives. The weighted average remaining amortization period for identifiable intangible assets acquired is 9.8 years. Amortization expense recognized during the twelve months ended December 31, 2025 was $16.0 million and was recorded in SG&A expenses in the consolidated statements of income. Estimated future amortization expense is as follows:
| 2026 | ||||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| Thereafter | ||||||||
| Total | $ | |||||||
56
Table of Contents
6.Debt
We had no 1.8 million in letters of credit outstanding and were in compliance with all covenants under the Amended ABL Credit Facility (as defined below) as of December 31, 2025.
The Amended ABL Credit Facility was amended in December 2025 (the “Amended ABL Credit Facility”). The amendment established a delayed‑draw term loan facility (the “Term Loan Facility”) and extended the maturity of the revolving credit facility. The amendment provides for a term loan facility of up to the lesser of $100.0 million and 85 % of the appraised value of eligible machinery and equipment, which may be drawn in up to two advances during the six months following December 1, 2025. The term loan facility was undrawn as of December 31, 2025. Any amounts drawn will mature three years from the initial funding date and bear interest, at the borrower’s option, at ABR or SOFR‑based rates plus applicable margins. The unused portion of the term loan facility is subject to a 0.05 % monthly unused line fee.
The December 2025 amendment also extended the maturity of the revolving credit facility to December 1, 2030. The Amended ABL Credit Facility requires compliance with a maximum leverage ratio of 2.50 to 1.00 for so long as the term loan facility is outstanding or available. Until the Term Loan Facility is repaid or terminated without being drawn, the collateral for the ABL Credit Facility was expanded to include certain equipment and intellectual property of Cactus Companies and its subsidiaries that are guarantors.
The Amended ABL Credit Facility provides up to $225.0 million in revolving commitments, of which $20.0 million is available for the issuance of letters of credit. Subject to certain terms and conditions set forth in the Amended ABL Credit Facility, Cactus Companies may request additional revolving commitments in an amount not to exceed $50.0 million, for a total of up to $275.0 million in revolving commitments. The maximum amount that Cactus Companies may borrow under the Amended ABL Credit Facility is subject to a borrowing base, which is based on a percentage of eligible accounts receivable and eligible inventory, subject to reserves and other adjustments.
Borrowings under the Amended ABL Credit Facility bear interest at Cactus Companies’ option at either (i) the Alternate Base Rate (as defined therein) (“ABR”), or (ii) the Adjusted Term SOFR Rate (as defined therein) (“Term Benchmark”), plus, in each case, an applicable margin. Letters of credit issued under the Amended ABL Credit Facility accrue fees at a rate equal to the applicable margin for Term Benchmark borrowings. The applicable margin for revolving loan borrowings ranges from 0.0 % to 0.5 % per annum for revolving loan ABR borrowings and 1.25 % to 1.75 % per annum for revolving loan Term Benchmark borrowings and, in each case, is based on the average quarterly availability of the revolving loan commitment under the Amended ABL Credit Facility for the immediately preceding fiscal quarter. The unused portion of the revolving commitment under the Amended ABL Credit Facility is subject to a commitment fee of 0.25 % per annum.
At December 31, 2025 and 2024, although there were no 1.25 %, plus the base rate of one, three or six month SOFR plus 0.10
Interest (Income) Expense, net
Interest (income) expense, net, including deferred financing cost amortization, was comprised of the following:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Interest under bank facilities | $ | $ | $ | ||||||||||||||
| Deferred financing cost amortization | |||||||||||||||||
| Finance lease interest | |||||||||||||||||
| Other | |||||||||||||||||
| Interest income | ( | ( | ( | ||||||||||||||
| Interest (income) expense, net | $ | ( | $ | ( | $ | ||||||||||||
57
Table of Contents
7.Income Taxes
Domestic and foreign components of income before income taxes were as follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Domestic | $ | $ | $ | ||||||||||||||
| Foreign | |||||||||||||||||
| Income before income taxes | $ | $ | $ | ||||||||||||||
The provision for income taxes consisted of:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Current: | |||||||||||||||||
| Federal | $ | $ | $ | ||||||||||||||
| State | |||||||||||||||||
| Foreign | |||||||||||||||||
| Total current income taxes | |||||||||||||||||
| Deferred: | |||||||||||||||||
| Federal | |||||||||||||||||
| State | |||||||||||||||||
| Foreign | ( | ( | |||||||||||||||
| Total deferred income taxes | |||||||||||||||||
| Total provision for income taxes | $ | $ | $ | ||||||||||||||
58
Table of Contents
Year Ended | |||||||||||
December 31, 2025 (1) | |||||||||||
Amount | Percent | ||||||||||
U.S. federal statutory tax rate | $ | % | |||||||||
State and local income taxes, net of federal income tax effect (2) | |||||||||||
| Foreign tax effects | |||||||||||
| Effect of cross-border tax laws | |||||||||||
| Tax credits | |||||||||||
| Foreign tax credits | ( | ( | |||||||||
| Other tax credits | ( | ( | |||||||||
| Changes in valuation allowances | |||||||||||
| Valuation allowance - foreign tax credits | |||||||||||
| Nontaxable or nondeductible items | |||||||||||
| Executive Compensation Limited | |||||||||||
| Other adjustments | |||||||||||
| Income allocable to non-controlling interest | ( | ( | |||||||||
| Other | |||||||||||
Total provision for income taxes and effective tax rate | $ | % | |||||||||
(1) Disaggregated in accordance with ASU 2023-09, which was adopted prospectively in 2025.
(2) For 2025, state taxes in New Mexico, Pennsylvania, and Texas make up majority (greater than 50%) of the tax effect of this category
| Year Ended December 31, | ||||||||||||||
2024 (1) | 2023 (1) | |||||||||||||
Income taxes at 21% statutory tax rate | $ | $ | ||||||||||||
| Net difference resulting from: | ||||||||||||||
| Profit of non-controlling interest not subject to U.S. federal tax | ( | ( | ||||||||||||
| Foreign income taxes (net of foreign tax credit) | ||||||||||||||
| State income taxes (excluding rate change) | ||||||||||||||
| Impact of change in forecasted state income tax rate | ||||||||||||||
| Foreign withholding taxes | ||||||||||||||
| Change in valuation allowance | ( | |||||||||||||
| Adjustments of prior year taxes | ( | |||||||||||||
| Stock compensation | ( | ( | ||||||||||||
| Nondeductible expenses associated with acquisition | ||||||||||||||
| Other | ( | |||||||||||||
| Total provision for income taxes | $ | $ | ||||||||||||
(1) As presented prior to adoption of ASU 2023-09, which was adopted prospectively in 2025.
Our effective tax rate was 22.6 %, 22.2 % and 18.1 % for the years ended December 31, 2025, 2024 and 2023, respectively. Cactus Inc. is only subject to federal and state income tax on its share of income from Cactus Companies.
59
Table of Contents
Income taxes paid (net of refunds) exceed 5% of total income taxes (net of refunds) in the following jurisdictions:
Year Ended | |||||
| December 31, 2025 | |||||
| Federal | $ | ||||
| State | |||||
| Foreign | |||||
Total income taxes paid (net of refunds) | $ | ||||
Except for the U.S. federal income tax cash payments reflected above, the only jurisdictions in which the Company remitted cash taxes in excess of 5% of total 2025 cash tax outflows were China and Australia, where cash taxes totaled $5.0 million and $2.8 million, respectively.
The components of deferred tax assets and liabilities are as follows:
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
Investment in Cactus Companies | $ | $ | |||||||||
| Imputed interest | |||||||||||
| Tax credits | |||||||||||
| Net operating loss and other carryforwards | |||||||||||
| Other | |||||||||||
| Deferred tax assets | |||||||||||
| Valuation allowance | ( | ( | |||||||||
| Deferred tax asset, net | |||||||||||
| Foreign withholding taxes | |||||||||||
| Other | |||||||||||
| Deferred tax liability, net | $ | $ | |||||||||
As of December 31, 2025, our liability related to the TRA was $262.9 million, representing 85 % of the calculated net cash savings in the United States federal, state and local and franchise tax that we anticipate realizing in future years from certain increases in tax basis and certain tax benefits attributed to imputed interest as a result of our acquisition of CC Units. We have determined it is more-likely-than-not that we will be able to utilize all of our tax basis subject to the TRA; therefore, we have recorded a liability related to the TRA for the tax savings we may realize from certain increases in tax basis and certain tax benefits attributable to imputed interest as a result of our acquisition (or deemed acquisition for United States federal income tax purposes) of CC Units. If we determine the utilization of this tax basis is not more-likely-than-not in the future, our estimate of amounts to be paid under the TRA would be reduced. In this scenario, the reduction of the liability under the TRA would result in a benefit to our pre-tax consolidated results of operations in conjunction with an increase to the valuation allowance and an offsetting adjustment to tax expense.
We record a deferred tax asset for the differences between our tax and book basis in the investment in Cactus Companies (Cactus LLC prior to the CC Reorganization) and imputed interest on the TRA. Based upon our cumulative earnings history and forecasted future sources of taxable income, we believe that we will be able to realize our U.S. deferred tax assets associated with our investment in Cactus Companies in the future. Subsequent to completion of the FlexSteel acquisition during 2023, we determined that we expect to generate sufficient taxable income of the appropriate type to allow for the realization of the deferred tax asset associated with our investment in Cactus Companies and recognized a $12.1 million tax benefit associated with the release of our valuation allowance previously provided. As such, as of December 31, 2023, we no longer have a valuation allowance against the deferred tax asset for the investment in Cactus Companies. During the fourth quarter of 2024, we recognized $2.1 million of tax expense associated with the revaluation of our deferred tax asset (the difference between our tax and book basis in the investment in Cactus Companies and imputed interest) as a result of a change in our forecasted state rate. We also record deferred tax assets for imputed interest, certain tax credits and net operating loss and other carryforwards. As of December 31, 2025, we have a valuation allowance of $12.7 million against these deferred tax assets, primarily associated with our portion of Cactus Companies’ accrued foreign taxes and state tax credits, due to uncertainty of realization.
60
Table of Contents
As of December 31, 2025, we have deferred tax assets on U.S. federal net operating loss (“NOL”) carryforwards of approximately $0.5 million which can be used to offset U.S. federal and state taxes payable in future years. The U.S. federal NOL carryforwards have no expiration date whereas the U.S. state NOL carryforwards generally will expire in periods beginning in 2041.
As of December 31, 2025, the Company had $5.5 million of unrecognized tax benefits all of which would not impact the effective tax rate if recognized. The Company recognizes the interest related to uncertain tax benefits as a component of income tax expense. No penalties or interest were recognized during the year ended December 31, 2025.
The aggregate changes in the balance of the Company's unrecognized tax benefits were as follows for the periods presented (in thousands):
| December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
Balance, beginning of year | $ | $ | $ | ||||||||||||||
Gross increases based on tax positions related to current year | |||||||||||||||||
Gross decreases based on tax positions related to prior years | ( | ||||||||||||||||
Balance, end of year | $ | $ | $ | ||||||||||||||
As a result of the FlexSteel acquisition, we acquired certain carryforward tax attributes, which were accounted for as unrecognized tax benefits in the acquisition accounting. This remains the balance of our uncertain tax positions as of December 31, 2025. The unrecognized tax benefits have been offset by an indemnification receivable from the seller of $5.5 million.
None of federal or state income tax returns are currently under examination by state taxing authorities. Our federal and state income tax returns for the years ended December 31, 2022 through December 31, 2024 remain open for all purposes of examination by the IRS and applicable state taxing jurisdictions. However, certain earlier tax years remain open for adjustment to the extent of their net operating loss and deferred interest carryforwards available for future utilization.
8.Stock-Based Compensation
We have a long-term incentive plan (“LTIP”) that provides for the grant of various stock-based compensation awards at the discretion of our Compensation Committee of our Board of Directors. Employees and non-employee directors are eligible to receive awards under the LTIP. Stock-based awards granted pursuant to the LTIP are expected to be settled in shares of our Class A common stock if they vest. Our stock-based awards do not have voting rights prior to vesting. Dividends declared are accumulated and paid upon vesting. We account for forfeitures when they occur and recognize the impact to stock-based compensation expense at that time. We recorded $24.5 million, $22.9 million and $18.1 million of stock-based compensation expense for the years ended December 31, 2025, 2024 and 2023, respectively. Stock-based compensation expense is primarily recorded in selling, general and administrative expenses. We recognized $0.3 million of expense, and $0.7 million and $1.2 million in tax benefits for tax deductions from the vesting of stock-based awards during the years ended December 31, 2025, 2024 and 2023, respectively. As of December 31, 2025, 4.9 million stock awards were available for grant.
Restricted Stock Units
Restricted stock units (“RSUs”) granted to our key employees generally vest over a three-year period (generally vesting ratably in equal tranches over the vesting period); however, RSUs granted to our non-employee directors generally vest on the first anniversary of the grant date. We recognize compensation expense over the requisite service period using straight-line amortization.
61
Table of Contents
The following table summarizes our RSU activity during the year ended December 31, 2025 (RSUs in thousands):
| No. of RSUs | Weighted Average Grant Date Fair Value ($) | ||||||||||
| Nonvested as of December 31, 2024 | $ | ||||||||||
| Granted | |||||||||||
| Vested | ( | ||||||||||
| Forfeited | ( | ||||||||||
| Nonvested as of December 31, 2025 | $ | ||||||||||
The weighted average grant date fair value of RSUs granted was $46.42 during 2025, $46.73 during 2024 and $43.19 during 2023. The total fair value of RSUs vested was $12.3 million during 2025, $8.7 million during 2024 and $10.1 million during 2023. There was approximately $23.3 million of unrecognized compensation expense relating to the unvested RSUs as of December 31, 2025. The unrecognized compensation expense will be recognized over the weighted average remaining vesting period of 2.0 years.
Performance Stock Units
Performance stock units (“PSUs”) are granted to our executive officers, and in rare instances, other key employees. Under these awards, the number of shares vested and earned is typically determined at the end of a three-year performance period based on our Return on Capital Employed (“ROCE”). The number of shares earned may range from 0 % to 200 % of the target units set forth in the applicable award agreement and is determined at the end of the performance period conditioned upon continued service and on our achievement of certain predefined targets as defined in the underlying performance stock unit agreements. PSUs cliff vest upon conclusion of the three-year performance period subject to review and approval of the Compensation Committee. As the ROCE target represents a performance condition, we recognize compensation expense for the performance share units on a straight-line basis over three years based on the probable outcome of the ROCE performance.
The following table summarizes our PSU activity during the year ended December 31, 2025 (PSUs in thousands at their target number of shares, which assumes achievement of 100 % of target, unless otherwise noted):
| No. of PSUs | Weighted Average Grant Date Fair Value ($) | ||||||||||
Nonvested as of December 31, 2024 | $ | ||||||||||
| Granted | |||||||||||
Vested (1) | ( | ||||||||||
Performance adjustment (2) | |||||||||||
Nonvested as of December 31, 2025 | $ | ||||||||||
(1) Represents shares vested based on actual performance metrics upon conclusion of the performance period.
(2) Represents additional shares issued to participants upon vesting due to the performance metrics exceeding target upon conclusion of the performance period.
62
Table of Contents
9.Revenue
We disaggregate revenue from contracts with customers into three revenue categories: (i) product revenues, (ii) rental revenues and (iii) field service and other revenues. We have predominately domestic operations, with a small amount of sales in Australia, Canada, the Middle East and other international markets. For the year ended December 31, 2025, we derived 76 % of our total revenues from the sale of our products, 8 % of our total revenues from rental and 16 % of our total revenues from field service and other. This compares to 75 % of our total revenues from the sale of our products, 9 % of our total revenues from rental and 16 % of our total revenues from field service and other for the year ended December 31, 2024. In 2023, we derived 74 % of our total revenues from the sale of our products, 10 % from rental and 16 % from field service and other. The following table presents our revenues disaggregated by category:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Product revenue | $ | $ | $ | ||||||||||||||
| Rental revenue | |||||||||||||||||
| Field service and other revenue | |||||||||||||||||
| Total revenue | $ | $ | $ | ||||||||||||||
Deferred revenue as of December 31, 2025 and 2024, had a balance of $7.7 million and $8.1 million, respectively, included in accrued expenses and other current liabilities in the consolidated balance sheets. Deferred revenue represents our obligation to transfer products or perform services for a customer for which we have received cash or billed in advance. The revenue that has been deferred will be recognized upon product delivery or as services are performed. As of December 31, 2025, we did not have any contracts with an original length of greater than a year from which revenue is expected to be recognized in the future related to performance obligations that are unsatisfied.
10.Leases
We lease real estate, apartments, forklifts, vehicles and other equipment under non-cancellable agreements. Certain of our leases include one or more options to renew, with renewal terms that can extend the lease term from to 10 years or greater. The exercise of lease renewal options is typically at our discretion. The measurement of the lease term includes options to extend or renew the lease when it is reasonably certain that we will exercise those options. Lease assets and liabilities are recognized at the commencement date based on the present value of minimum lease payments over the lease term. To determine the present value of future minimum lease payments, we use the implicit rate when readily determinable; however, many of our leases do not provide an implicit rate. Therefore, to determine the present value of minimum lease payments, we use our incremental borrowing rate based on the information available at the commencement date of the lease. Our finance lease agreements typically include an interest rate that is used to determine the present value of future lease payments. Short-term operating leases with an initial term of twelve months or less are not recorded on our balance sheet. Minimum lease payments are expensed on a straight-line basis over the lease term, including reasonably certain renewal options.
The following are the components of operating and finance lease costs:
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Finance lease cost: | |||||||||||
| Amortization of right-of-use assets | $ | $ | |||||||||
| Interest expense | |||||||||||
| Operating lease cost | |||||||||||
| Short-term lease cost | |||||||||||
| Sublease income | ( | ( | |||||||||
| Total lease cost | $ | $ | |||||||||
63
Table of Contents
The following is supplemental cash flow information for our operating and finance leases:
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||
| Operating cash flows from finance leases | $ | $ | |||||||||
| Operating cash flows from operating leases | |||||||||||
| Financing cash flows from finance leases | |||||||||||
| Total | $ | $ | |||||||||
| Right-of-use assets obtained in exchange for new lease obligations: | |||||||||||
| Operating leases | $ | $ | |||||||||
| Finance leases | |||||||||||
| Total | $ | $ | |||||||||
The following is the aggregate future lease payments for operating and finance leases as of December 31, 2025:
| Operating | Finance | ||||||||||
| 2026 | $ | $ | |||||||||
| 2027 | |||||||||||
| 2028 | |||||||||||
| 2029 | |||||||||||
| 2030 | |||||||||||
| Thereafter | |||||||||||
| Total undiscounted lease payments | |||||||||||
| Less: effects of discounting | ( | ( | |||||||||
| Present value of lease payments | $ | $ | |||||||||
The following represents the average lease terms and discount rates for our operating and finance leases:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | ||||||||||||||||
| Weighted average remaining lease term: | |||||||||||||||||
| Finance leases | years | years | |||||||||||||||
| Operating leases | years | years | |||||||||||||||
| Weighted average discount rate | |||||||||||||||||
| Finance leases | % | % | |||||||||||||||
| Operating leases | % | % | |||||||||||||||
As a lessor, we rent a fleet of frac valves and ancillary equipment and equipment used for pipe installation for short-term rental periods, typically to three months . Our lessor portfolio consists mainly of operating leases for equipment utilized during the drilling, completion and production phases of our customers’ wells. At this time, most lessor agreements contain less than three-month terms with no renewal options that are reasonably certain to exercise, or early termination options based on established terms specific to the individual agreement. See Note 9 for disaggregation of revenue.
11.Tax Receivable Agreement
In connection with our IPO, we entered into the TRA with certain direct and indirect owners of Cactus LLC (after the CC Reorganization, Cactus Companies). These owners are referred to as the “TRA Holders”. The TRA generally provides for payment by Cactus Inc. to the TRA Holders of 85 % of the net cash savings, if any, in U.S. federal, state and local income tax and franchise tax that Cactus Inc. actually realizes or is deemed to realize in certain circumstances as a result of (i) certain increases in tax basis that occur as a result of Cactus Inc.’s acquisition (or deemed acquisition for U.S. federal income tax purposes) of all or a portion of such TRA Holder’s CW Units (or CC Units after the CC Reorganization) in connection with our
64
Table of Contents
IPO or any subsequent offering, or pursuant to any other exercise of the Redemption Right or the Call Right (each as defined below), (ii) certain increases in tax basis resulting from the repayment of borrowings outstanding under Cactus LLC’s term loan facility in connection with our IPO and (iii) imputed interest deemed to be paid by Cactus Inc. as a result of, and additional tax basis arising from, any payments Cactus Inc. makes under the TRA. We retain the remaining 15 % of the cash savings.
The TRA liability is calculated by determining the tax basis subject to the TRA (“tax basis”) and applying a blended tax rate to the basis differences and calculating the resulting iterative impact. The blended tax rate consists of the U.S. federal income tax rate and an assumed combined state and local income tax rate driven by the apportionment factors applicable to each state. As of December 31, 2025, the total liability from the TRA was $262.9 million with $21.3 million reflected in current liabilities based on the expected timing of our next payment. The payments under the TRA will not be conditional on a holder of rights under the TRA having a continued ownership interest in either Cactus Companies or Cactus Inc.
The term of the TRA commenced upon completion of our IPO and will continue until all tax benefits that are subject to the TRA have been utilized or expired, unless we exercise our right to terminate the TRA. If we elect to terminate the TRA early (or it is terminated early due to certain mergers, asset sales, other forms of business combinations or other changes of control relating to Cactus Companies), our obligations under the TRA would accelerate and we would be required to make an immediate payment equal to the present value of the anticipated future payments to be made by us under the TRA and such payment is expected to be substantial. The calculation of anticipated future payments will be based upon certain assumptions and deemed events set forth in the TRA, including the assumptions that (i) we have sufficient taxable income to fully utilize the tax benefits covered by the TRA and (ii) any CC Units (other than those held by Cactus Inc.) outstanding on the termination date are deemed to be redeemed on the termination date. Any early termination payment may be made significantly in advance of the actual realization, if any, of the future tax benefits to which the termination payment relates.
We may elect to defer payments due under the TRA if we do not have available cash to satisfy our payment obligations under the TRA. Any such deferred payments under the TRA generally will accrue interest from the due date for such payment until the payment date.
12.Equity
As of December 31, 2025, Cactus Inc. owned 86.3 % of Cactus Companies, as compared to 85.6 % as of December 31, 2024. As of December 31, 2025, Cactus Inc. had outstanding 68.9 million shares of Class A common stock (representing 86.3 % of the total voting power) and 11.0 million shares of Class B common stock (representing 13.7 % of the total voting power).
Equity Offering
In January 2023, Cactus Inc. completed an underwritten offering of 3,224,300 shares of Class A common stock at a price to the underwriters of $51.36 per share for net proceeds of $165.6 million (net of $6.9 million of underwriting discounts and commissions). In addition to the underwriting discounts and commissions, approximately $2.2 million of costs directly associated with the stock issuance were recorded as a reduction to additional paid-in capital.
FlexSteel Acquisition
In conjunction with the FlexSteel acquisition, a restricted stock award of 128,150 shares of Class A common stock was issued under the Company’s long-term incentive plan to a key employee in exchange for cash consideration of $6.5 million. The shares were restricted from sale or trading and were subject to vesting requirements for one year from grant date.
CC Reorganization
As part of the CC Reorganization in connection with the acquisition of FlexSteel, Cactus Companies acquired all of the outstanding units representing limited liability company interests of Cactus LLC ( “CW Units”) in exchange for an equal number of CC Units issued to each of the previous owners of CW Units other than Cactus Inc. (the “CW Unit Holders”). Upon the completion of the CC Reorganization, CW Unit Holders ceased to be holders of CW Units and, instead, became holders of a number of CC Units equal to the number of CW Units such CW Unit Holders held immediately prior to the completion of the CC Reorganization. After the CC Reorganization, we refer to the owners of CC Units, other than Cactus Inc. (along with their permitted transferees), as “CC Unit Holders.” Following the completion of the CC Reorganization, CC Unit Holders own one share of our Class B Common Stock for each CC Unit such CC Unit Holder owns.
In connection with the CC Reorganization, Cactus Inc. and the owners of CC Units entered into the Amended and Restated Limited Liability Company Operating Agreement of Cactus Companies (the “Cactus Companies LLC Agreement”),
65
Table of Contents
which contains substantially the same terms and conditions as the Second Amended and Restated Limited Liability Company Operating Agreement of Cactus LLC (the “Cactus Wellhead LLC Agreement”), which was the limited liability company operating agreement of Cactus LLC prior to the CC Reorganization. Cactus Inc. was responsible for all operational, management and administrative decisions relating to Cactus LLC’s business for the period from completion of our IPO until the CC Reorganization and relating to Cactus Companies’ business for periods after the CC Reorganization.
Redemptions of CC Units
Pursuant to the Cactus Companies LLC Agreement, each holder of CC Units has, subject to certain limitations, the right (the “Redemption Right”) to cause Cactus Companies to acquire all or at least a minimum portion of its CC Units for, at Cactus Companies’ election, (x) shares of our Class A common stock at a redemption ratio of one share of Class A common stock for each CC Unit redeemed, subject to conversion rate adjustments for stock splits, stock dividends and reclassification and other similar transactions, or (y) an equivalent amount of cash. Alternatively, upon the exercise of such redemption right, Cactus Inc. (instead of Cactus Companies) has the right (the “Call Right”) to acquire each tendered CC Unit directly from the exchanging CC Unit Holder for, at its election, (x) one share of Class A common stock, subject to conversion rate adjustments for stock splits, stock dividends and reclassifications and other similar transactions, or (y) an equivalent amount of cash. In connection with any redemption of CC Units pursuant to such Redemption Right or our Call Right, the corresponding number of shares of Class B common stock will be canceled.
Any exercise by Cactus Companies or Cactus Inc. of the right to acquire redeemed CC Units for cash must be approved by the board of directors of Cactus Inc. To date, neither Cactus Inc. nor Cactus Companies (Cactus LLC prior to the CC Reorganization) have elected to acquire CC Units (including CW Units prior to the CC Reorganization) for cash in connection with exchanges by CC Unit Holders (CW Unit Holders prior to the CC Reorganization). It is the policy of Cactus Inc. that any exercise by Cactus Inc. or Cactus Companies of the right to acquire redeemed CC Units for cash must be approved by a majority of those members of the board of directors of Cactus Inc. who have no interest in such transaction.
Since our IPO in February 2018, an aggregate of 49.6 million CC Units (including CW Units prior to the CC Reorganization) and a corresponding number of shares of Class B common stock have been redeemed in exchange for shares of Class A common stock. The following is a roll forward of ownership of CC Units (including CW Units prior to the CC Reorganization) for the three years ended December 31, 2025 (in thousands):
| Units | |||||
| CW Units outstanding as of December 31, 2022 | |||||
| CC Unit redemptions | ( | ||||
| CC Units outstanding as of December 31, 2023 | |||||
| CC Unit redemptions | ( | ||||
CC Units outstanding as of December 31, 2024 | |||||
| CC Unit redemptions | ( | ||||
CC Units outstanding as of December 31, 2025 | |||||
Certain CC Unit Holders (CW Unit Holders prior to the CC Reorganization) redeemed 0.5 million, 2.6 million and 0.9 million CC Units (CW Units prior to the CC Reorganization), together with a corresponding number of shares of Class B common stock, pursuant to the Redemption Right for the years ended December 31, 2025, 2024 and 2023, respectively. Cactus Inc. acquired the redeemed CC Units (CW Units prior to the CC Reorganization) and a corresponding number of shares of Class B common stock (which shares of Class B common stock were then canceled) and issued 0.5 million, 2.6 million and 0.9 million shares of Class A common stock to the redeeming CC Unit Holders (CW Unit Holders prior to the CC Reorganization) during the same respective time periods. As a result of all of the CC Unit (CW Units prior to the CC Reorganization) redemptions during the years ended December 31, 2025, 2024 and 2023, Cactus Inc. increased its ownership in Cactus Companies (Cactus LLC prior to the CC Reorganization) and accordingly, increased its equity by approximately $8.6 million, $41.7 million and $12.8 million, respectively, resulting from a reduction in the non-controlling interest.
Dividends
Aggregate cash dividends of $0.54 , $0.50 and $0.46 per share of Class A common stock declared during the years ended December 31, 2025, 2024 and 2023 totaled $37.8 million, $34.0 million and $30.3 million, respectively. Cash dividends paid during the years ended December 31, 2025, 2024 and 2023 totaled $37.4 million, $33.7 million and $30.1 million, respectively. Dividends accrue on unvested stock-based awards on the date of record and are paid upon vesting. Dividends are not paid to our Class B common stockholders; however, a corresponding distribution up to the same amount per share as our
66
Table of Contents
Class A common stockholders is paid to our CC Unit Holders (CW Unit Holders prior to the CC Reorganization) for any dividends declared on our Class A common stock. See Note 16 for further discussion of distributions made by Cactus Companies.
Share Repurchase Program
On June 6, 2023, our board of directors authorized the Company to repurchase shares of its Class A common stock for an aggregate purchase price of up to $150 million. Under our share repurchase program, shares may be repurchased from time to time in open market transactions or block trades, in privately negotiated transactions or any other method permitted under U.S. securities laws, rules and regulations. The repurchase program does not obligate the Company to purchase any particular amount of shares, and the repurchase program may be suspended or discontinued at any time at the Company’s discretion. During the twelve months ended December 31, 2025, the Company did not purchase any shares under the share repurchase program. As of December 31, 2025, $146.3 million remained authorized for future repurchases of Class A common stock under the program.
Limitation of Members’ Liability
Under the terms of the Cactus Companies LLC Agreement, the members of Cactus Companies are not obligated for debt, liabilities, contracts or other obligations of Cactus Companies. Profits and losses are allocated to members as defined in the Cactus Companies LLC Agreement.
13.Commitments and Contingencies
Due to the nature of our business, we are, from time to time, involved in routine litigation or subject to disputes or claims related to our business activities, including workers’ compensation claims and employment related disputes.
A range of total possible losses for all litigation matters cannot be reasonably estimated. Based on our consideration of all relevant facts and circumstances, we do not expect the ultimate outcome of currently pending lawsuits or claims against us, other than as discussed below, will have a material adverse effect on our financial position, results of operations or cash flows, however, there can be no assurance as to the ultimate outcome of these matters. With respect to the litigation described below, if there was an adverse outcome there could be a material impact on our business, financial condition and results of operations expected for the year. Litigation is subject to inherent uncertainties and management's view may change in the future. Therefore, there can be no assurance as to the ultimate outcome of any dispute or claim.
On August 20, 2021, Cactus filed a complaint against Cameron International Corporation (“Cameron”) in the U.S. District Court for the Southern District of Texas, Civil Action No.: 4:21-cv-02720-ASH, seeking a declaratory judgment that Cactus frac operations do not infringe certain Cameron patents and that such patents are invalid. In response to that action, Cameron has asserted infringement of certain of those patents by Cactus’ SafeLink® frac flow system and is seeking past royalties and other damages related to the alleged infringement. The parties have been unable to reach an amicable settlement. The jury trial, originally scheduled on June 9, 2025, was delayed and no new trial date has been set. At this time, we are not able to predict the outcome of these claims.
14. Fair Value Measurements
Authoritative guidance on fair value measurements provides a framework for measuring fair value and establishes a fair value hierarchy that prioritizes the inputs used to measure fair value, giving the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 inputs) and the lowest priority to unobservable inputs (Level 3 inputs).
The carrying value of cash and cash equivalents, receivables, accounts payable and accrued expenses approximates fair value based on the short-term nature of these accounts.
The fair value of our foreign currency forwards was less than $0.1
We had no
At December 31, 2023, the earn-out liability was measured at a fair value of $20.8 million using Level 3 unobservable inputs. The fair value at December 31, 2023 was determined based on the evaluation of the probability and amount of earn-out that may be achieved based on expected future performance of FlexSteel using a Monte Carlo simulation model. The Monte
67
Table of Contents
Carlo simulation model used assumptions including revenue volatilities, risk free rates, credit discount rates and revenue discount rates. The following table sets forth the range of inputs for the significant assumptions utilized to determine the fair value as of December 31, 2023:
| December 31, 2023 | ||||||||||||||
| Risk-free interest rate | to | |||||||||||||
| Expected revenue volatility | ||||||||||||||
| Revenue discount rate | to | |||||||||||||
| Credit discount rate | ||||||||||||||
The following table presents a summary of the changes in fair value of our earn-out liability measured using Level 3 inputs:
| Opening balance at February 28, 2023 | $ | |||||||
| Changes in fair value | ||||||||
| Balance at December 31, 2023 | ||||||||
| Changes in fair value | ||||||||
Balance at August 31, 2024 | $ | |||||||
The FlexSteel acquisition contingent consideration earn-out period ended June 30, 2024. The earn-out payment was made in September 2024.
15.Segment Reporting
Prior to the acquisition of FlexSteel, we operated in a single operating segment which reflected how our business was managed and the nature of our products and services. Upon completion of the acquisition, we re-evaluated our reportable segments and now report two
Our reporting segments are:
•Pressure Control – engaged in the design, manufacture, sale, installation and service of wellhead and pressure control equipment utilized during the drilling, completion and production phases of oil and gas wells.
•Spoolable Technologies – engaged in the design, manufacture, sale, installation, service and associated rental of onshore spoolable pipe technologies utilized for production, gathering and takeaway transportation of oil, gas or other liquids.
The Company’s CODM evaluates performance and allocates resources for the reportable segments based on each segment’s profit or loss (which includes certain corporate overhead allocations directly attributable to each of the segments). Intersegment revenue and expenses have been eliminated in the computation of total revenue and operating income.
The CODM uses the segment profit or loss for each segment predominantly in the annual budget and forecasting process. The CODM considers quarter-to-quarter variances on a sequential basis when making decisions about the allocation of operating and capital resources to each segment.
68
Table of Contents
Financial information by segment for the years ended December 31, 2025, 2024, and 2023 is summarized below.
| Year Ended December 31, | |||||||||||||||||
| 2025 | |||||||||||||||||
| Pressure Control | Spoolable Technologies | Total | |||||||||||||||
Revenues from external customers | $ | $ | $ | ||||||||||||||
Intersegment revenue | |||||||||||||||||
| Total revenues | |||||||||||||||||
Reconciliation of revenue | |||||||||||||||||
Elimination of intersegment revenue | ( | ||||||||||||||||
Total consolidated revenues | |||||||||||||||||
Less:(1) | |||||||||||||||||
Cost of revenue from external customers | $ | $ | |||||||||||||||
Intersegment cost of revenue | |||||||||||||||||
Total cost of revenues | |||||||||||||||||
Reconciliation of cost of revenue | |||||||||||||||||
Elimination of intersegment cost of revenue | ( | ||||||||||||||||
Total consolidated cost of revenue | |||||||||||||||||
Selling, general, administrative expenses and other (2) | |||||||||||||||||
Segment profit | $ | $ | $ | ||||||||||||||
Reconciliation of segment profit | |||||||||||||||||
Elimination of intersegment profit | ( | ||||||||||||||||
Total consolidated segment profit | $ | ||||||||||||||||
Corporate expenses (3) | ( | ||||||||||||||||
Total operating income | $ | ||||||||||||||||
Interest income, net | |||||||||||||||||
Other expense, net | ( | ||||||||||||||||
| Income before income taxes | $ | ||||||||||||||||
(1) The significant expense categories and amounts align with the segment with the segment-level information that is regularly provided to the chief operating decision maker.
(2) For each reportable segment, the 'Selling, general, administrative expenses and other' line items category includes: salaries and wages, stock based compensation amortization expense, depreciation expense, professional fees, rent expense, and other miscellaneous items.
(3) Comprised primarily of expenses not allocated to our operating segments.
69
Table of Contents
| Year Ended December 31, | |||||||||||||||||
| 2024 | |||||||||||||||||
| Pressure Control | Spoolable Technologies | Total | |||||||||||||||
Revenues from external customers | $ | $ | $ | ||||||||||||||
Intersegment revenue | |||||||||||||||||
| Total revenues | |||||||||||||||||
Reconciliation of revenue | |||||||||||||||||
Elimination of intersegment revenue | ( | ||||||||||||||||
Total consolidated revenues | |||||||||||||||||
Less:(1) | |||||||||||||||||
Cost of revenue from external customers | $ | $ | $ | ||||||||||||||
Intersegment cost of revenue | |||||||||||||||||
| Total cost of revenues | |||||||||||||||||
Reconciliation of cost of revenue | |||||||||||||||||
Elimination of intersegment cost of revenue | ( | ||||||||||||||||
Total consolidated cost of revenue | |||||||||||||||||
Selling, general, administrative expenses and other (2) | |||||||||||||||||
Segment profit | $ | $ | $ | ||||||||||||||
Reconciliation of segment profit | |||||||||||||||||
Elimination of intersegment profit | ( | ||||||||||||||||
Total consolidated segment profit | $ | ||||||||||||||||
Corporate expenses (3) | ( | ||||||||||||||||
Total operating income | $ | ||||||||||||||||
Interest income, net | |||||||||||||||||
Other income, net | |||||||||||||||||
| Income before income taxes | $ | ||||||||||||||||
(1) The significant expense categories and amounts align with the segment with the segment-level information that is regularly provided to the chief operating decision maker.
(2) For each reportable segment, the 'Selling, general, administrative expenses and other' line items category includes: salaries and wages, stock based compensation amortization expense, depreciation expense, professional fees, rent expense, and other miscellaneous items. Spoolable technologies also includes the change in fair value of the earn-out liability.
(3) Comprised primarily of expenses not allocated to our operating segments.
70
Table of Contents
| Year Ended December 31, | |||||||||||||||||
| 2023 | |||||||||||||||||
| Pressure Control | Spoolable Technologies | Total | |||||||||||||||
Revenues from external customers | $ | $ | $ | ||||||||||||||
Intersegment revenue | |||||||||||||||||
| Total revenues | |||||||||||||||||
Reconciliation of revenue | |||||||||||||||||
Elimination of intersegment revenue | |||||||||||||||||
Total consolidated revenues | |||||||||||||||||
Less:(1) | |||||||||||||||||
Cost of revenue from external customers | $ | $ | $ | ||||||||||||||
Intersegment cost of revenue | |||||||||||||||||
Total cost of revenues | |||||||||||||||||
Reconciliation of cost of revenue | |||||||||||||||||
Elimination of intersegment cost of revenue | |||||||||||||||||
Total consolidated cost of revenue | |||||||||||||||||
Selling, general, administrative expenses and other (2) | |||||||||||||||||
Segment profit | $ | $ | $ | ||||||||||||||
Reconciliation of segment profit | |||||||||||||||||
Elimination of intersegment profit | |||||||||||||||||
Total consolidated segment profit | $ | ||||||||||||||||
Corporate expenses (3) | ( | ||||||||||||||||
Total operating income | $ | ||||||||||||||||
Interest expense, net | ( | ||||||||||||||||
Other income, net | |||||||||||||||||
| Income before income taxes | $ | ||||||||||||||||
(1) The significant expense categories and amounts align with the segment with the segment-level information that is regularly provided to the chief operating decision maker.
(2) For each reportable segment, the 'Selling, general, administrative expenses and other' line items category includes: salaries and wages, stock based compensation amortization expense, depreciation expense, professional fees, rent expense, and other miscellaneous items. Spoolable technologies also includes the change in fair value of the earn-out liability.
(3) Comprised primarily of expenses not allocated to our operating segments.
71
Table of Contents
Additional financial information by operating segment for the years ended December 31, 2025, 2024, and 2023 is summarized below.
| Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
Depreciation and amortization: | ||||||||||||||||||||
| Pressure Control | $ | $ | $ | |||||||||||||||||
| Spoolable Technologies | ||||||||||||||||||||
| Total depreciation and amortization | $ | $ | $ | |||||||||||||||||
| Capital expenditures: | ||||||||||||||||||||
| Pressure Control | $ | $ | $ | |||||||||||||||||
| Spoolable Technologies | ||||||||||||||||||||
| Total capital expenditures | $ | $ | $ | |||||||||||||||||
Segment Assets:(1) | ||||||||||||||||||||
| Pressure Control | $ | $ | $ | |||||||||||||||||
| Spoolable Technologies | ||||||||||||||||||||
| Total segment assets | ||||||||||||||||||||
Corporate and other(2) | ||||||||||||||||||||
| Total assets | $ | $ | $ | |||||||||||||||||
(1) Segment assets consist of accounts receivables, inventories, prepaid expenses and other current assets, property and equipment, net, goodwill and other intangible assets, net.
(2) Consists primarily of cash and cash equivalents and deferred tax assets.
Based on the location where the sale originated, revenues in the United States exceeded 95 90
16.Related Party Transactions
When needed, we rent a plane under dry lease from a company owned by a member of Cactus Companies. These transactions are under short-term rental arrangements and the agreement governing these transactions does not qualify as a lease. Effective January 1, 2022, we pay a base hourly rent of $2,500 per flight hour of use of the aircraft, payable monthly, for the hours of aircraft operation. During the year ended December 31, 2025, expense recognized in connection with these rentals totaled $0.2 million as compared to $0.1 million and $0.3 million during each of the years ended December 31, 2024 and 2023, respectively. As of December 31, 2025 and 2024, we had no 2,350 per day for their personal use of the pilots employed by the Company, depending on how many company pilots are utilized for the day.
The TRA agreement is with certain direct and indirect holders of CC Units (CW Unit Holders prior to the CC Reorganization), including certain of our officers, directors and employees. These TRA Holders have the right in the future to receive 85 % of the net cash savings, if any, in U.S. federal, state and local income tax and franchise tax that Cactus Inc. actually realizes or is deemed to realize in certain circumstances. The total liability from the TRA as of December 31, 2025 was $262.9 million. We pay professional fees to assist with maintenance of the TRA and composite tax payments in advance of the state tax return filings which are reimbursable from the TRA Holders. As of December 31, 2025 and 2024, amounts due from the TRA Holders for fees and estimated state tax payments made on their behalf totaled $0.3 million and $0.4 million, respectively. The balances are included in accounts receivable, net in the consolidated balance sheets.
Distributions made by Cactus Companies (Cactus LLC prior to the CC Reorganization) are generally required to be made pro rata among all its members. During the years ended December 31, 2025, 2024 and 2023, Cactus Companies (Cactus LLC prior to the CC Reorganization) distributed $95.5 million, $68.0 million and $75.8 million, respectively, to Cactus Inc. to
72
Table of Contents
17.Earnings Per Share
Basic earnings per share of Class A common stock is calculated by dividing the net income attributable to Cactus Inc. during the period by the weighted average number of shares of Class A common stock outstanding during the same period. Diluted earnings per share of Class A common stock is calculated by dividing the net income attributable to Cactus Inc. during that period by the weighted average number of common shares outstanding assuming all potentially dilutive shares were issued. We use the if-converted method to determine the potential dilutive effect of outstanding CC Units and corresponding shares of outstanding Class B common stock. We use the treasury stock method to determine the potential dilutive effect of our unvested stock-based compensation awards assuming that the proceeds will be used to purchase shares of Class A common stock. For our unvested performance stock units, we first apply the criteria for contingently issuable shares before determining the potential dilutive effect using the treasury stock method.
The following table summarizes the basic and diluted earnings per share calculations:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Numerator: | |||||||||||||||||
| Net income attributable to Cactus Inc.—basic | $ | $ | $ | ||||||||||||||
Net income attributable to non-controlling interest(1) | |||||||||||||||||
Net income attributable to Cactus Inc.—diluted(1) | $ | $ | $ | ||||||||||||||
| Denominator: | |||||||||||||||||
| Weighted average Class A shares outstanding—basic | |||||||||||||||||
Effect of dilutive shares(2) | |||||||||||||||||
| Weighted average Class A shares outstanding—diluted | |||||||||||||||||
| Earnings per Class A share—basic | $ | $ | $ | ||||||||||||||
Earnings per Class A share—diluted(1)(2) | $ | $ | $ | ||||||||||||||
(1)The numerator is adjusted in the calculation of diluted earnings per share under the if-converted method to include net income attributable to the non-controlling interest calculated as its pre-tax income adjusted for a corporate effective tax rate of 26
(2)Diluted earnings per share for the year ended December 31, 2025 excludes 11.2 million weighted average shares of Class B common stock as the effect would be anti-dilutive.
18.Supplemental Cash Flow Information
Non-cash investing and financing activities were as follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Right-of-use assets obtained in exchange for new lease obligations | $ | $ | $ | ||||||||||||||
| Property and equipment in accounts payable | |||||||||||||||||
Cash paid for interest and income taxes was as follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Cash paid for interest | $ | $ | $ | ||||||||||||||
Cash paid for income taxes, net of refunds | |||||||||||||||||
73
Table of Contents
During the years ended December 31, 2025, 2024 and 2023, we issued 0.5 million, 2.6 million and 0.9 million shares of Class A common stock, respectively, pursuant to redemptions of CC Units (CW Units prior to the CC Reorganization) by holders thereof.
19.Subsequent Events
On June 2, 2025, Cactus Companies entered into a Framework Agreement (the “Framework Agreement”) with Baker Hughes Holdings LLC (“Baker Hughes Holdings”) and Baker Hughes Pressure Control LLC, formerly known as Baker Hughes Pressure Control LP (the “Joint Venture”), each of which is an indirect subsidiary of Baker Hughes Company (“Baker Hughes Company”), pursuant to which the Company agreed to acquire 65 % of the Joint Venture, which holds Baker Hughes Company’s former surface pressure control business (the “Acquired Business”).
On January 1, 2026 (the “Closing Date”), Baker Hughes Holdings and certain of its affiliates sold 65 % of the limited liability company membership interests in the Joint Venture (“Membership Interests”) to Cactus UK Holding Limited (the “Cactus Member”), a subsidiary of Cactus Companies, for a cash purchase price of $344.5 million (on a debt-free, and, except as noted below, cash-free basis), subject to certain working capital, cash, debt, capital expenditure and other customary adjustments after the Closing Date (the “Purchase Price”). The Joint Venture retained minimum cash of approximately $70.0 million (the “Minimum Cash Amount”).
From and after the second anniversary of the Closing Date, (a) Baker Hughes Pressure Control Holdings LLC (the "Baker Member") has the right to sell to either the Joint Venture or the Cactus Member, and the Joint Venture or the Cactus Member, as applicable, shall be obligated to purchase from the Baker Member, and (b) the Cactus Member has the right to purchase or cause the Joint Venture to purchase from the Baker Member, and the Baker Member shall be obligated to sell to the Joint Venture or the Cactus Member, as applicable, all of the Membership Interests held directly or indirectly by Baker Hughes Company (such options described in (a) and (b), the "Exit Option"). The purchase price (the “Exit Price”) will be based on an enterprise value of the Joint Venture using a multiple of six times its Adjusted EBITDA (as defined and calculated pursuant to the Amended and Restated Limited Liability Company Agreement of the Joint Venture, entered into on the Closing Date by the Joint Venture, the Cactus Member, the Baker Member, Cactus Inc. and Baker Hughes Company (the "Joint Venture LLC Agreement")), subject to a maximum valuation of $660.0 million, and if the Cactus Member elects to purchase or cause the Joint Venture to purchase the Membership Interests, a minimum valuation of $530.0 million.
For so long as the Baker Member continues to hold Membership Interests, the Cactus Member shall, subject to certain exceptions, cause the Joint Venture to operate its business in the ordinary course consistent with past practice and not take any actions, the primary intent of which could reasonably be expected to reduce the Exit Price. Certain actions of the Board of Directors of the Joint Venture, including, among other things, matters relating to capital structure, incurrence of indebtedness above a certain threshold, increasing the size of the Board of Directors and the entry by the Joint Venture into a new line of business, require the affirmative vote of more than 75 % of the total voting power of the Board of Directors, including, except to the extent the Baker Member is in default, at least one director appointed by the Baker Member.
No member of the Joint Venture may transfer any Membership Interest other than certain permitted transfers, including but not limited to (a) certain permitted transfers to such member’s wholly owned and controlled affiliates and (b) certain transfers made in connection with the exercise of the Exit Option.
The Joint Venture LLC Agreement includes non-compete restrictions on Baker Hughes Company and the Company with respect to (a) developing, manufacturing, distributing, marketing, renting and selling certain products and (b) providing services, including installation, maintenance, rentals, repairs and aftermarket spares related thereto, in the case of both (a) and (b) for surface pressure control applications in certain countries provided in the Joint Venture LLC Agreement, subject to certain exceptions.
In order to compensate Baker Hughes Holdings for the Minimum Cash Amount, Cactus Companies (i) paid Baker Hughes Holdings 65 % of the Minimum Cash Amount, or $45.5 million, on the Closing Date, and (ii) will pay Baker Hughes Holdings 35 % of the Minimum Cash Amount, or $24.5 million, as follows: $10.0 million on the first anniversary of the Closing Date, and $14.5 million at such time as Baker Hughes Company ceases to be a member, directly or indirectly, of the Joint Venture.
74
Table of Contents
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We have evaluated, under the supervision and with the participation of our principal executive officer and principal financial officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a‑15(e) and 15d‑15(e) under the Exchange Act as amended) as of December 31, 2025. Based upon that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of such date. Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by us in reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure and is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC.
Management’s Report on Internal Control Over Financial Reporting
Management’s annual report on internal control over financial reporting is incorporated by reference to page 40 of this Annual Report on Form 10-K.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting during the quarter ended December 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information
During the three months ended December 31, 2025, no director or officer (as defined in Rule 16a-1(f) of the Exchange Act) of Cactus, Inc. adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
PART III
Item 10. Directors, Executive Officers and Corporate Governance
The information required by this item (and only such information) is incorporated by reference to our Definitive Proxy Statement for our 2026 Annual Meeting of Shareholders to be filed with the SEC within 120 days of December 31, 2025 (“Proxy Statement”).
Item 11. Executive Compensation
The information required by this item (and only such information) is incorporated by reference to our Proxy Statement.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by this item (and only such information) is incorporated by reference to our Proxy Statement.
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information required by this item (and only such information) is incorporated by reference to our Proxy Statement.
75
Table of Contents
Item 14. Principal Accountant Fees and Services
The information required by this item (and only such information) is incorporated by reference to our Proxy Statement.
PART IV
Item 15. Exhibits and Financial Statement Schedules
(1) Financial Statements
The consolidated financial statements of Cactus, Inc. and Subsidiaries and the Report of Independent Registered Public Accounting Firm are included in Part II, Item 8. of this Annual Report. Reference is made to the accompanying Index to Consolidated Financial Statements.
(2) Financial Statement Schedules
All financial statement schedules have been omitted because they are not applicable or the required information is presented in the financial statements or the notes thereto.
76
Table of Contents
(3) Index to Exhibits
The exhibits required to be filed or furnished pursuant to Item 601 of Regulation S-K are set forth below.
| Exhibit No. | Description | |||||||
| 2.1 | Agreement and Plan of Merger among Cactus, Inc., Atlas Merger Sub, LLC, HighRidge Resources, Inc. and FlexSteel LTIP LP, dated as of December 30, 2022 (incorporated by reference to Exhibit 2.1 to the Registrant’s Form 8-K filed with the Commission on January 3, 2023) | |||||||
| 2.2 | Framework Agreement by and among Cactus Companies, LLC, Baker Hughes Holdings LLC and Baker Hughes Pressure Control LP, dated as of June 2, 2025 (incorporated by reference to Exhibit 2.1 to the Registrant’s Form 8-K filed with the Commission on June 2, 2025) | |||||||
| 3.1 | Restated Certificate of Incorporation of Cactus, Inc. (incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K filed with the Commission on May 20, 2024) | |||||||
| 3.2 | Amended and Restated Bylaws of Cactus, Inc. (incorporated by reference to Exhibit 3.6 to the Registrant's Form 10-Q filed with the Commission on August 1, 2024) | |||||||
4.1 | Description of the Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 (incorporated by reference to Exhibit 4.1 to the Registrant's Form 10-K filed with the Commission on February 27, 2025) | |||||||
| 10.1 | Amended and Restated Limited Liability Company Operating Agreement of Cactus Companies, LLC, dated February 27, 2023 (incorporated by reference to Exhibit 10.2 to the Registrant’s Form 8‑K filed with the Commission on March 1, 2023) | |||||||
| 10.2† | Second Amended and Restated Employment Agreement with Scott Bender, dated as of April 25, 2021 (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed with the Commission on April 28, 2021) | |||||||
| 10.3† | Second Amended and Restated Employment Agreement with Joel Bender, dated as of April 25, 2021 (incorporated by reference to Exhibit 10.2 to the Registrant’s Form 8-K filed with the Commission on April 28, 2021) | |||||||
| 10.4† | Amended and Restated Noncompetition Agreement with Scott Bender, dated as of February 12, 2018 (incorporated by reference to Exhibit 10.5 to the Registrant’s Form 8‑K filed with the Commission on February 12, 2018) | |||||||
| 10.5† | Amended and Restated Noncompetition Agreement with Joel Bender, dated as of February 12, 2018 (incorporated by reference to Exhibit 10.6 to the Registrant’s Form 8‑K filed with the Commission on February 12, 2018) | |||||||
| 10.6† | Form of Director and Officer Indemnification Agreement (incorporated by reference to Exhibit 10.5 to the Registrant’s Registration Statement on Form S-1 filed with the Commission on January 12, 2018) | |||||||
| 10.7†* | Schedule of Director and Officer Indemnification Agreements Identical in All Material Respects to the Form of Director and Officer Indemnification Agreement Filed as Exhibit 10.6 to this Annual Report pursuant to Instruction 2 to Item 601 of Regulation S-K | |||||||
| 10.8 | Tax Receivable Agreement (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8‑K filed with the Commission on February 12, 2018) | |||||||
| 10.9 | Registration Rights Agreement (incorporated by reference to Exhibit 4.1 to the Registrant’s Form 8‑K filed with the Commission on February 12, 2018) | |||||||
| 10.10† | Cactus, Inc. Long-Term Incentive Plan (amended and restated effective May 13, 2025) (incorporated by reference to Appendix A to the Registrant’s Definitive Proxy Statement on Schedule 14A filed with the Commission on April 1, 2025) | |||||||
| 10.11† | Form of Restricted Stock Agreement under the Cactus Inc. Long Term Incentive Plan (incorporated by reference to Exhibit 10.10 to the Registrant’s Form S‑1 Registration Statement filed with the Commission on January 12, 2018) | |||||||
| 10.12† | Form of Restricted Stock Unit Agreement under the Cactus Inc. Long Term Incentive Plan (incorporated by reference to Exhibit 10.11 to the Registrant’s Form S‑1 Registration Statement filed with the Commission on January 12, 2018) | |||||||
10.13† | Form of Restricted Stock Unit Agreement under the Cactus Inc. Long Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 10-Q filed with the Commission on May 1, 2025) | |||||||
| 10.14 | Amended and Restated Credit Agreement, dated as of February 28, 2023, among Cactus Companies, LLC, as borrower, certain subsidiaries of Cactus Companies, LLC, as guarantors, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent, an issuing bank and swingline lender (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8‑K filed with the Commission on March 1, 2023) | |||||||
77
Table of Contents
| Exhibit No. | Description | |||||||
| 10.15 | First Amendment to Amended and Restated Credit Agreement, dated as of February 28, 2023, among Cactus Companies, LLC, as borrower, certain subsidiaries of Cactus Companies, LLC, as guarantors, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent, an issuing bank and swingline lender (incorporated by reference to Exhibit 10.14 to the Registrant’s Form 10-K filed with the Commission on February 29, 2024) | |||||||
| 10.16 | Second Amendment to Amended and Restated Credit Agreement, dated as of June 2, 2025, among Cactus Companies, LLC, as borrower, certain subsidiaries of Cactus Companies, LLC, as guarantors, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent, an issuing bank and swingline lender (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 10-Q filed with the Commission on July 31, 2025) | |||||||
10.17 | Third Amendment to Amended and Restated Credit Agreement, dated December 1, 2025, among Cactus Companies, LLC, as borrower, certain subsidiaries of Cactus Companies, LLC, as guarantors, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent, an issuing bank and swingline lender (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed with the Commission on December 2, 2025) | |||||||
10.18† | Form of Restricted Stock Unit Agreement (Directors, one-year vesting) (incorporated by reference to Exhibit 4.7 to the Registrants Form S-8 Registration Statement filed with the Commission on May 29, 2018) | |||||||
10.19†* | Form of Restricted Stock Unit Agreement (two-year vesting) | |||||||
10.20† | Form of Restricted Stock Unit Agreement (Directors, three-year vesting) (incorporated by reference to Exhibit 4.8 to the Registrants Form S-8 Registration Statement filed with the Commission on May 29, 2018) | |||||||
10.21† | Form of Performance Stock Unit Agreement (three-year vesting) under the Cactus, Inc. Long Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed with the Commission on March 17, 2020) | |||||||
10.22† | Form of Performance Stock Unit Agreement (two and three-year vesting) under the Cactus, Inc. Long Term Incentive Plan (incorporated by reference to Exhibit 10.2 to the Registrant’s Form 8-K filed with the Commission on March 17, 2020) | |||||||
10.23† | Form of Performance Stock Unit Agreement under the Cactus, Inc. Long Term Incentive Plan (incorporated by reference to Exhibit 10.26 to the Registrant’s Form 10-K filed with the Commission on February 28, 2022) | |||||||
10.24† | Form of Performance Stock Unit Agreement under the Cactus, Inc. Long Term Incentive Plan (incorporated by reference to Exhibit 10.2 to the Registrant’s Form 10-Q filed with the Commission on May 1, 2025) | |||||||
10.25† | Form of Restricted Stock Agreement (four-year cliff vesting) under the Cactus, Inc. Long Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 10-Q filed with the Commission on May 10, 2023) | |||||||
10.26† | Offer Letter to Stephen Tadlock dated May 30, 2017 (incorporated by reference to Item 10.17 of the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2018, filed with the Commission on March 15, 2019) | |||||||
10.27† | Offer Letter to Jay A. Nutt dated May 20, 2024 (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 10-Q filed with the Commission on August 1, 2024) | |||||||
10.28 | First Amendment to the Tax Receivable Agreement, dated as of February 29, 2024, by and among Cactus, Inc., Cadent Management Services, LLC and the TRA Holders identified therein (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 10-Q filed with the Commission on May 2, 2024) | |||||||
10.29 | Amended and Restated Limited Liability Company Agreement of Baker Hughes Pressure Control LLC (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Commission on January 2, 2026) | |||||||
19 | ||||||||
| 21.1* | List of Subsidiaries of Cactus, Inc. | |||||||
| 23.1* | Consent of PricewaterhouseCoopers LLP | |||||||
| 31.1* | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |||||||
| 31.2* | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |||||||
| 32.1** | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |||||||
| 32.2** | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |||||||
97 | Policy for Recovery of Performance-Based Incentive Compensation from Executive Officers (incorporated by reference to Exhibit 97 to the Registrant’s Form 10-K filed with the Commission on February 29, 2024) | |||||||
| 101.INS* | XBRL Instance Document - the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document | |||||||
78
Table of Contents
| Exhibit No. | Description | |||||||
| 101.SCH* | XBRL Inline Taxonomy Extension Schema Document | |||||||
| 101.CAL* | XBRL Inline Taxonomy Calculation Linkbase Document | |||||||
| 101.LAB* | XBRL Inline Taxonomy Label Linkbase Document | |||||||
| 101.PRE* | XBRL Inline Taxonomy Presentation Linkbase Document | |||||||
| 101.DEF* | XBRL Inline Taxonomy Definition Document | |||||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | |||||||
* Filed herewith.
** Furnished herewith.
† Management contract or compensatory plan or arrangement.
Item 16. Form 10‑K Summary
None.
79
Table of Contents
Signatures
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Cactus, Inc. | ||||||||
Date: February 26, 2026 | By: | /s/ Scott Bender | ||||||
| Scott Bender | ||||||||
| Chief Executive Officer, Chairman of the Board and Director | ||||||||
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| Signature | Title | Date | ||||||||||||
| /s/ Scott Bender | Chief Executive Officer, Chairman of the Board and Director (Principal Executive Officer) | February 26, 2026 | ||||||||||||
| Scott Bender | ||||||||||||||
/s/ Jay A. Nutt | Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) | February 26, 2026 | ||||||||||||
Jay A. Nutt | ||||||||||||||
| /s/ Joel Bender | President and Director | February 26, 2026 | ||||||||||||
| Joel Bender | ||||||||||||||
| /s/ Melissa Law | Director | February 26, 2026 | ||||||||||||
| Melissa Law | ||||||||||||||
| /s/ Michael McGovern | Director | February 26, 2026 | ||||||||||||
| Michael McGovern | ||||||||||||||
| /s/ John (Andy) O’Donnell | Director | February 26, 2026 | ||||||||||||
| John (Andy) O’Donnell | ||||||||||||||
| /s/ Gary Rosenthal | Director | February 26, 2026 | ||||||||||||
| Gary Rosenthal | ||||||||||||||
| /s/ Bruce Rothstein | Director | February 26, 2026 | ||||||||||||
| Bruce Rothstein | ||||||||||||||
| /s/ Alan Semple | Director | February 26, 2026 | ||||||||||||
| Alan Semple | ||||||||||||||
| /s/ Tym Tombar | Director | February 26, 2026 | ||||||||||||
| Tym Tombar | ||||||||||||||
80
FAQ
What does Cactus Inc (WHD) do in the oilfield services industry?
Cactus Inc designs, manufactures, sells and rents pressure control equipment and spoolable pipe for onshore unconventional oil and gas wells. Its products support drilling, completion and production, and it also provides field services, repairs and rentals through facilities in the United States and select international markets.
How is Cactus Inc (WHD) structured and who controls voting power?
Cactus Inc is a holding company whose main asset is its interest in Cactus Companies. It has Class A and Class B common stock tied to LLC units. As of December 31, 2025, Cactus Inc owned 86.3% of Cactus Companies, while Cactus WH Enterprises held about 12.1% of overall voting power.
What are the key segments and revenue mix for Cactus Inc (WHD)?
Cactus operates two segments: Pressure Control and Spoolable Technologies. In 2025, 76% of revenue came from product sales, 8% from rentals and 16% from field service and other, with products including wellheads, frac trees, spoolable pipe and associated fittings and services.
What major acquisitions or joint ventures has Cactus Inc (WHD) completed?
Cactus acquired the FlexSteel business in 2023 for $658.6 million, expanding its spoolable pipe offering. On January 1, 2026, it bought 65% of Baker Hughes Pressure Control LLC for $344.5 million, forming a joint venture that holds Baker Hughes Company’s former surface pressure control business.
How exposed is Cactus Inc (WHD) to oil and gas cycles and regulation?
Cactus depends heavily on oil and gas drilling, completion and production activity, especially in U.S. shale basins. Its filing highlights sensitivity to commodity prices, customer capital spending, hydraulic fracturing regulation, climate-related rules, environmental compliance costs and potential constraints on permits or water disposal.
What human capital and safety metrics does Cactus Inc (WHD) report?
Cactus reports over 1,500 employees worldwide and tracks safety through OSHA Total Recordable Incident Rates. In 2025, Pressure Control reported a TRIR of 1.49 and Spoolable Technologies 0.79, with no work-related fatalities, alongside training, diversity and benefits programs to support retention and development.
Cactus
NYSE:WHD
WHD Rankings
WHD Latest News
Oct 29, 2025
Cactus Announces Third Quarter 2025 Results
WHD Latest SEC Filings
Feb 25, 2026
[8-K] Cactus, Inc. Reports Material Event
Jan 12, 2026
[Form 4] Cactus, Inc. Insider Trading Activity
Jan 5, 2026
[Form 4] Cactus, Inc. Insider Trading Activity
WHD Stock Data
3.55B
68.33M
Oil & Gas Equipment & Services
Oil & Gas Field Machinery & Equipment
United States
HOUSTON